North Pacific Marine Science Organization (PICES)
(approved 24th March, 1992)
(amended to establish level of WCF 17th October, 1992)
(amended Regulation 6, 22nd October, 1995)
(amended Regulation 12, 18th April, 2006)
(amended Regulation 6, 24th October, 2015)

Financial Regulations

Applicability

These Regulations shall govern the financial administration of the North Pacific Marine Science Organization (PICES), hereinafter referred to as the “Organization”.

Financial Year

Regulation 1
The financial year of the Organization shall be from January 1 to December 31.

Terms

Regulation 2
  • The term “host State” means the State in which the Secretariat of the Organization is located;
  • the term “currency” and all related terms used in these Regulations or in any decision of the Council, such as budget, funds, contributions, and accounts, shall mean the currency of the host State, unless specified otherwise by the Council.

Budget

Regulation 3
  • The Executive Secretary shall prepare and submit to the annual meeting of the Council a draft budget and justification, comprising estimates of income and expenditures of the Organization for the ensuing financial year. At the same time the Executive Secretary shall prepare a forecast budget and justification for the subsequent financial year, and shall transmit the draft budget and forecast budget estimates to all Contracting Parties at least 60 days before the opening of the annual meeting;
  • the draft and forecast budgets shall be divided into sections (e.g., office expenses, travel, meeting costs, publications), and shall be accompanied by such information as may be required by a Contracting Party or deemed necessary or desirable by the Executive Secretary;
  • the draft budget shall include a statement of the financial implications for subsequent financial years;
  • the Council shall consider the observations and conclusions of the Finance and Administration Committee prior to adoption of the budget;
  • at each annual meeting, the Council shall consider and adopt its budget for the ensuing financial year. The forecast budget for the subsequent financial year shall be considered by the Council, but not adopted.

Appropriations

Regulation 4
  • The appropriations adopted by the Council shall constitute an authorization for the Executive Secretary to incur obligations and make payments for the purposes and up to amounts for which the appropriations were adopted;
  • appropriations shall remain available for one year following the end of the financial year to which they relate to the extent that they are required to discharge obligations incurred during that financial year. At the end of this period, any unliquidated prior year obligation shall be canceled, or, where the obligation remains a valid charge, transferred as an obligation against current appropriations, unless the Council decides otherwise;
  • the Executive Secretary may make transfers of up to 10% of appropriations between sections (e.g., office expenses, travel, meeting costs, publications). The Chairman of the Council may authorize the Executive Secretary to make transfers of not more than 20% between sections. All transfers shall be reported by the Executive Secretary to the next annual meeting of the Council;
  • the Chairman of the Council, after consultations with a Delegate from each of the Contracting Parties, may authorize expenditures from the Working Capital Fund for unforeseen and extraordinary expenses necessary to the good conduct of the business of the Organization.

Provision of Funds

Regulation 5
  • Each Contracting Party shall make contributions to the annual budget calculated in accordance with a scheme to be adopted by the Council;
  • following approval of the budget for a financial year, the Executive Secretary shall send a copy thereof to each Contracting Party notifying them of the required contributions. Contributions shall be considered due as of the first day of the financial year to which they relate;
  • a Contracting Party will be considered to have met its financial obligations for a financial year when its annual contribution for that year has been paid in full;
  • the contribution to the Organization of a Party becoming a Contracting Party by accession during the course of a financial year shall for that financial year be a part of the annual contribution proportional to the number of complete months remaining in the financial year from the date it became a Contracting Party. Such contributions shall be considered due within thirty days of becoming a Party.

Funds

Regulation 6
  • For the purposes of accounting for the income and expenditures of the Organization, a General Fund and a Working Capital Fund shall be established. The Organization may also establish other funds to further its interests;
  • contributions paid by Contracting Parties to cover regular expenses of the Organization shall be credited to the General Fund;
  • the Council shall determine the required level of the Working Capital Fund, and revise it as appropriate. The Working Capital Fund may be increased by miscellaneous income, pursuant to Regulation 6(vi) and any cash surplus in the General Fund at the close of the financial year following the annual meeting, to the extent that any such surplus is not required to meet outstanding commitments in terms of Regulation 4(ii). The amount of the Working Capital Fund shall be reviewed by the Council at each annual meeting and may be revised effective on the first day of the ensuing financial year
  • funds available in the Working Capital Fund may be used:
    • temporarily to the extent necessary to finance appropriations pending receipt of annual contributions by Contracting Parties;
    • to cover unforeseen and extraordinary expenses as provided by Regulation 4(iv);
    • for special expenses approved by the Council that will contribute significantly to the program of the Organization.
  • the Council may designate some portion of an excess in the Working Capital Fund as income in the budget of the ensuing year and use such amounts to reduce contributions of Contracting Parties in the ensuing financial year; however, if the actual excess at the close of the financial year is less than the amount estimated, then the Executive Secretary shall reduce the said appropriation or transfer to the extent necessary to prevent the Fund from falling below the amount established pursuant to Regulation 6(iii), and shall adjust said annual contributions to compensate for the reduced appropriation or transfer. The Executive Secretary shall promptly inform the Council of such actions;
  • where contributions are received from new Contracting Parties after the commencement of the financial year and such funds have not been taken into account in formulating the budget, such contributions shall be credited to the Working Capital Fund;
  • the Relocation and Home Leave Fund shall be used, to the extent appropriated by the Council as part of the budget decision, to pay relocation expenses of appropriate new employees and their dependents to the seat of the Secretariat and for removal after the period of employment has ended; for home leave for internationally recruited staff and their dependents, in accordance with established rules and practices and for severance and excess accumulated vacation pay (all employees). The Council shall determine the required level of the Relocation and Home Leave Fund, and revise it as appropriate. The Relocation and Home Leave Fund is to be financed first from the levy in lieu of taxes from Secretariat staff, then tax refunds and then annual appropriations if necessary. The amount of the Relocation and Home Leave Fund shall be reviewed by the Council at each annual meeting and may be revised effective on the first day of the ensuing financial year;
  • the Trust Fund is established to facilitate the participation of a broad spectrum of scientists in activities of the Organization. Contracting Parties and other donors may make voluntary contributions to the Trust Fund consistent with Regulation 7, upon concurrence of the Executive Secretary. The Trust Fund is administered by the Executive Secretary, subject to guidelines established by Council. The Executive Secretary shall report at each annual meeting on the condition of the Trust Fund, including the contributions and applications received and their disposition;
  • any advance payment made by a Contracting Party to the Organization or any Contracting Party credit shall be carried as a credit for the respective Contracting Party or Parties in the Working Capital Fund until such Contracting Party or Parties informs the Executive Secretary of any disposition it desires of any such credit or credits.

Fund-raising

Regulation 7
All fund-raising activities and voluntary contributions shall be consistent with the policies, aims, and activities of the Organization, as established by the Council.

Miscellaneous Income

Regulation 8
  • All income, other than contributions to the budget under Regulation 5, advances referred to in Regulation 6(ix), voluntary contributions referred to in Regulation 8(ii), and interest on the amounts held temporarily in interest-bearing deposits, shall be classified as miscellaneous income and credited to the appropriate fund;
  • voluntary contributions in excess of annual contributions by Contracting Parties and voluntary contributions offered by other than Contracting Parties may be accepted by the Executive Secretary, subject to Regulation 7, and credited to the appropriate fund.

Custody of Funds

Regulation 9
  • The Executive Secretary shall designate a bank(s) or financial institution(s) insured by the host State’s Deposit Insurance Corporation in which the funds of the Organization shall be kept. The Executive Secretary shall inform the Council of the name and branch of the bank(s) or financial institutions;
  • shall establish one Chairman according to regulation 17;
    • The Executive Secretary may make short-term investments of funds not needed for the immediate requirements of the Organization. Such investments shall be restricted to securities and other investments issued under Government guarantee or interest bearing accounts operated by a bank where the Organization holds an account. The details of the investment transactions and income derived shall be reported in the documents supporting the budget;
    • with regards to funds for which use is not required for at least 12 months, longer-term investments may be authorized by the Council provided that such action is consistent with the terms under which the funds were lodged with the Organization.

Internal Control

Regulation 10
  • The Executive Secretary shall;
    • cause all payments to be made on the basis of supporting vouchers and other documents which ensure that the goods or services have been received and that payment has not previously been made;
    • designate staff members who may receive funds, incur obligations, and make payments on behalf of the Organization;
    • maintain and be responsible for internal financial control to insure:
      • the regularity of the receipt, custody, and disposal of all income and other financial resources of the Organization;
      • the conformity of the obligations and expenditures with the appropriations adopted by the Council;
      • the economic use of the resources of the Organization.
    • obtain appropriate bonding for staff members designated under sub-paragraph (c) as well as for the Executive Secretary.
  • no obligation shall be incurred until allotments or other appropriate authorizations have been made in writing under the authority of the Executive Secretary;
  • the Executive Secretary, after full investigation, may propose to the Council the writing off of assets, provided that the external auditor (referred to in Regulation 13) so recommends. A statement of such assets shall be included in the annual accounts;
    • For all purchases and contracts for equipment and office supplies exceeding an amount set by the Council, the Executive Secretary shall solicit written proposals by advertisement or direct request for equipment, supplies, and other requirements from at least three persons or firms able to supply the equipment, supplies, or other requirements, except where the Executive Secretary has certified that only a single supplier exists;
    • the lowest bidder shall be awarded the contract, except where the Executive Secretary, following consultation with the Chairman, has certified that this procedure would not be in the best interests of the Organization.

Accounts

Regulation 11
  • The Executive Secretary shall ensure that appropriate records and accounts are kept of the transactions and affairs of the Organization and shall do all things necessary to ensure that all payments out of the Organization’s resources are correctly made and properly authorized and that adequate control is maintained over the assets of, or in the custody of, the Organization and over the incurring of liabilities by the Organization;
  • the Executive Secretary shall submit to the external auditor (referred to in Regulation 13), not later than ninety days immediately following the end of the fiscal year, statements for that fiscal year showing:
    • the income and expenditures;
    • the status of appropriations, including:
      • the original budget provisions;
      • the appropriations as modified by transfers;
      • any other income;
      • the amounts charged against these provisions and other income.
    • the financial assets and liabilities of the Organization;
    • details of investments;
    • proposals for writing off of assets under Regulation 9(iii).
  • These financial statements shall be prepared in a form approved by the Council after consultation with the external auditor;
  • Appropriate separate accounts shall be kept for all established funds.

Salaries and Expenses

Regulation 12
  • The Council shall adopt a salary scale and benefits for the Executive Secretary and the staff based, to the extent possible, on the salary scale, position classification system, and benefits of the public service of the host State. The Council shall review annually, and adjust when deemed appropriate, salaries and benefits of staff members in the light of performance and changes in the cost of living;
  • moving expenses of new and departing permanent staff members shall be paid by the Organization, generally in accordance with practices of the host State;
  • travel expenses incurred by the Secretariat staff while on Organization business shall be paid by the Organization to the extent possible, in accordance with practices of the host State regarding travel expenses of its public service;
  • travel and other expenses incurred by the Chairman and the Chairman of the Science Board, while on Organization business, shall be paid by the Organization. Other representatives of the Organization shall be paid, for travel and other expenses, while on official business approved by Council;
  • salaries and wages of employees shall be assessed amounts estimated to be equal to liability for income taxes of the host State for any employee exempt from income taxes by reason of employment by the Organization. The amount which accrues from such assessments shall be credited first to the Relocation and Home Leave Fund and then to the Working Capital Fund to defray expenses of the Organization;
  • salaries and wages of employees who are citizens or permanent residents of the host State shall be assessed a levy based on the Host State’s graduated federal income tax rates and calculated on the lesser of the salaries and wages paid to such employees and the taxable income computed under the Host State’s tax laws. The amount which accrues from such assessments shall be credited to the Working Capital Fund to defray expenses of the Organization.

External Audit

Regulation 13
  • The Council shall appoint an external auditor from a reputable auditing firm. The auditor may be consulted on the introduction or amendment of any financial regulations and procedures and on detailed accounting methods, on all matters affecting auditing procedures and methods, and on any other financial matter affecting the Organization;
  • the external auditor, or persons authorized by the auditor, shall be entitled at all reasonable times to full and free access to all accounts and records of the Organization relating directly or indirectly to the receipt or payment of money by the Organization, or to the acquisition, receipt, custody, or disposal of assets by the Organization. The external auditor, or persons authorized by the auditor, may make copies of or take extracts from any such accounts or records;
  • the external auditor shall examine the financial statements submitted by the Executive Secretary under Regulation 11(ii) and conclude this examination within six weeks of their receipt. The external auditor shall conduct this examination in conformity with generally accepted auditing standards and shall report to the Council on all relevant matters including:
    • whether, in the auditor’s opinion, the statements are based on proper accounts and records;
    • whether the statements are in agreement with the accounts and records;
    • whether, in the auditor’s opinion, the receipt, expenditure, and investment money and the acquisition and disposal of assets by the Organization during the year have been in accordance with these Regulations;
    • observations with respect to the efficiency and economy of the financial procedures and the conduct of business, the accounting system, internal financial controls, and the administration and management of the Organization.
  • the Executive Secretary shall provide the external auditor with the facilities required for the performance of the audit;
  • the Executive Secretary shall provide to the Contracting Parties a copy of the audit report and the audited financial statements within 15 days of their receipt;
  • the Council shall, if necessary, invite the external auditor to attend discussions on any item under scrutiny and consider recommendations arising from the auditor’s findings;
  • the Council shall, following consideration of the audited annual financial statements and audit report submitted to the Contracting Parties under Regulation 13(v), signify its acceptance of the audited annual financial statements or take such other action as it may consider appropriate.

General Provisions

Regulation 14
  • In considering matters which have financial or administrative implications, the Council shall have before it an evaluation of those implications from the Executive Secretary;
  • the Executive Secretary is empowered to delegate to other Secretarial staff members such powers concerning financial matters as may be deemed desirable;
  • the Organization may take out suitable insurance with a reputable financial institution against normal risks to its assets;
  • these Regulations shall be effective as of the date of their approval by the Council and may be amended by the Council from time to time in accordance with the Rules of Procedure;
  • in case of doubt as to the interpretation and application of any of the foregoing Regulations, the Executive Secretary is authorized to rule thereon after consultation with the Chairman of the Council.