XII.5.5 Write-offs, administrative waivers and ex-gratia payments

 

Write-offs and Administrative Waivers      

10   Write-off action applies to uncollectable debts for which a receivable account has been established in the books of the Organization but where recovery is not considered possible.

20   Administrative waiver action applies to the non-recovery of certain over-payments and refunds due to the Organization for which no receivable account has been established in the books of the Organization.  These situations arise when it is proposed not to proceed with recovery of the over-payment or incorrect payment of salaries, allowances, fees or other claims, or to waive recovery of refunds or adjustments resulting from incomplete or unsatisfactory performance under grants, contractual service agreements, local cost or other arrangements.

30   Approval to take write-off or administrative waiver action must be sought as follows and based upon full documentation indicating the efforts made to recover the amount owing or not to pursue recovery:

• At regional office level, the Director of Administration and Finance, with concurrence of Regional Director, may where justified authorize the write-off of uncollectable debts or administrative waivers up to the equivalent of US$ 10,000 with a copy to the Comptroller. Amounts in excess must be referred to the Comptroller. 
• At headquarters, and cases in regional offices in excess of US$ 10,000, the Comptroller may, where justified, authorize write-off action in respect of uncollectable debts or administrative waivers up to the equivalent of US$ 25,000. 
• In cases where the amount involved exceeds US$ 25,000,  the Comptroller refers these requests to  the ADG, GMG/HQ.

4​0   In each case, all relevant documents together with a copy of the authorization must be attached to the accounting document and uploaded in ECM. 
 

Ex-gratia  payment

50   The term 'ex gratia' means 'out of good will'.   An ex gratia payment is a voluntary payment where there is no obligation or legal liability to do so.  An ex gratia payment may be determined as:

1. An amount to be paid for which there is no clear legal obligation.
2. An amount to be paid which is over and above the prescribed legal obligation to pay.

6​​​0  The authority to authorize ex gratia payments rests with the Director General (Financial Regulation 13.5).  Ex gratia payments are discretionary and made on an exceptional basis, in the interests of equity or otherwise in the best interests of the Organization. Drivers for making these payments typically include a moral imperative; an alternative means to resolve a dispute; or to protect the reputation of the organization.

70  All such payment must receive prior approval by the Comptroller at headquarters before any commitment is made on behalf of the Organization.  The Comptroller consults with the Legal Counsel as may be necessary and obtains any necessary approvals.

80  Ex gratia payments should be supported by a discharge/settlement agreement, that protects the organization against any further claims relating to the matter for which the ex gratia payment is being made, and is also clear that WHO assumes no tax liability with regard to any ex gratia payment that it makes to any party. Furthermore, future consideration should be given to establishing a time limit for making ex gratia payments, after which point the opportunity to put forward a request​ ​​expires.

90  The basis for justification for the decision to make the ex gratia payment, and related documentation, must be provided for the proposal, and subsequently retained for audit, including: 

• A synopsis of the situation leading to the need to make the payment
• Options explored or actions taken to otherwise prevent the need for a payment, and the business case to justify making the payment
• The basis for estimating the amount to be paid
• The terms and conditions for making the payment
• Policy or precedent implications
• Source of funding​
  

​Reporting

100   All write offs, administrative waivers and ex gratia payments are reported to the External Auditors.   Write offs and ex gratia payments are reported in the Audited Financial Statements (refer to Regulation XIII – 13.5, 13.6).  Disclosure in the notes to the financial statements includes the amounts, the comparatives and the reason for the write off or ex gratia payment. 

110 According to Financial Rule 106.6, ex gratia payments together with an explanation of its justification, shall be promptly reported to both the External Auditor and the Head of the Office of Internal Oversight Services.​