Report of the Audit & Control Committee

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This document has been made available in electronic format
     by the International Co-operative Alliance ICA
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                     January 1996


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       Report of the Audit & Control Committee
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by Pal Bartus*


For the first time, the Committee will deliver a summary report for a
two-year period as a result of the new ICA structure with the highest
authority meeting only every second year.

Detailed reports from the Audit & Control Committee have previously been
submitted to the membership for each of the two years; 1993 was included in
the ICA Annual Report 1993-1994 (Review of International Co-operation,
volume 87 No 4 1994) and the 1994 finances are included in the XXXI ICA
Congress Agenda & Reports (Review of International Co-operation, volume 88
No 3 1995).

Since the General Assembly in Geneva in 1993, the Committee has had the
following composition: Dr Markus Schelker of Coop Switzerland (Chairman),
Dr Pal Bartus of Co-op Hungary, Mr Ivar O. Hansen of NBBL Norway, Mr
Jacques Moreau of G.N.C. France and Mr Frank Dahrendorf of VdK Germany. Mr
Dahrendorf was unfortunately prevented from participating in the meetings
during this period for health reasons, and was substituted by Mr Wilhelm
Kaltenborn. Mr Claes Thorselius, the ICA Deputy Director-General, has been
the Secretary to the Committee.

The Committee holds two meetings per year. The first one, in the spring,
concentrates on the financial statements for the previous year and the
completed audits of all offices. The second meeting, in the autumn, has its
focus on a general review of the financial and organisational situation, a
special review of one of the Regional Offices and a look at the forthcoming
budget and audit work. In addition, the Chairman meets with the auditors
for a day in Geneva prior to the spring meeting. Around year-end, the
Chairman is also meeting with the ICA President to review the budget and
workplan proposals for the coming year.
Through these meetings and in concurrence with the external auditors, Ernst
& Young S.A., we are of the opinion that:

1.   The structure and organisation of work is correct, although we have to
point out again that the Secretariat is trimmed down to a bare minimum and
cannot be more cost efficient than it already is.

2.   The routines and control mechanisms are appropriate and well functioning.

In our detailed reports we have had reason to point at the lack of
discipline regarding timely payment of Subscriptions to ICA and submission
of required documents. It is gratifying to see that the complaints have
been heard and measures have been effective, leading to obvious
improvements during 1994. These improvements are continuing in 1995.

The subscriptions, being the main source of income for ICA, are stagnant.
Over the last six years the annual total has been around CHF 2 million. The
increase in 1994 over 1989 is a mere 1%, in spite of the fact that the
number of member organisations has increased by more than 6% during the
same time, the minimum subscription has increased from CHF 750 to CHF 3,000
and there have been increasing turnovers and results in many countries -
either as a result of improving business or of inflatory reasons. The
reason for this situation is the turbulence on the currency market over the
last few years, which has lead to the appreciation of the CHF compared to
practically all other currencies.

The stagnant income has lead to many cost-cutting measures and, as
mentioned above, this has been done to its limits. It is also clear that
the ICA finances is constantly balancing on a very narrow margin.

1993 was the major year for implementing the new ICA Structure.
Unfortunately, deficits were sustained in all of the Offices, except in New
Delhi. The total deficit was CHF 184,081, as described in detail in the
Annual Report for this year. The Audit & Control Committee recommended that
this deficit was covered from the ICA's General Reserves.

Again as presented in our detailed report in the documentation for this
Assembly, the financial situation could be turned around. The target of
avoiding any deficits and producing a small surplus was reached. The result
amounted to a mere CHF 5,957, but still a surplus.

We understand that the Board and the Secretariat will engage in major
planning activities regarding priorities and financial issues, including a
review of the subscription system, in the near future. The Audit & Control
Committee finds these activities of vital importance and will lend all
possible assistance to the efforts.

Finally, on the basis of this Summary Report and the individual Annual
Reports, the Audit & Control Committee recommends that the Financial
Statements for 1993 and 1994 are approved by the General Assembly.

* Mr. Bartus is President of the National Federation of Consumer
Co-operatives (Co-op Hungary) in Budapest and member of the ICA Audit and
Control Committee.