Chapter

Appendix VI. Financial Statements of International Monetary Fund and Staff Retirement Fund

Author(s):
International Monetary Fund
Published Date:
September 1964
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Letter of Transmittal

July 2, 1964

My dear Mr. Chairman:

In accordance with Section 20(b) of the By-Laws of the Fund, I have the honor to submit for the consideration of the Board of Governors the audited financial statements of the International Monetary Fund, and the Staff Retirement Fund, for the year ended April 30, 1964, together with two memoranda from the Audit Committee, which include the audit certificates.

In conformity with the By-Laws, the external audit of the Fund has been performed by an Audit Committee consisting of auditors nominated by three member countries. At the Fund’s request, El Salvador, India, and Sweden nominated auditors to serve on this Committee. They respectively nominated Mr. Juan Samuel Quinteros, Superintendent of Banks and Comptroller of the Currency for El Salvador; Mr. A. K. Mukherji, Additional Deputy Comptroller and Auditor General of India; and Mr. Karl Janne Walck, Head of Division at the National Accounting and Audit Bureau of Sweden. The Auditors thus nominated were confirmed by the Executive Directors.

It will be noted that, in the period under review, ordinary income amounted to $36,352,072 and expenditure amounted to $13,120,523, resulting in a net income of $23,231,549, which has been transferred provisionally to General Reserve pending Board of Governors’ action. In addition, income of $27,485,414 from the Fund’s gold investment program has been transferred to Special Reserve.

The detailed report of the Audit Committee is being submitted separately to the Board of Governors.

Yours sincerely,

/s/

P.-P. Schweitzer

Chairman of the Executive Board

Chairman of the Board of Governors

International Monetary Fund

Memorandum by the Audit Committee

June 23, 1964

To the Managing Director and the Executive Directors

International Monetary Fund

The report of the Audit Committee, dated June 23, 1964, submitted through you to the Board of Governors, on the audit of the financial records and transactions of the Fund for the fiscal year ended April 30, 1964, includes the following paragraphs relating to the scope of the audit conducted, and the audit certificate given:

Scope of the Audit

The Audit Committee conducted its audit according to generally accepted auditing standards and took cognizance of the requirements of Section 20(b) of the By-Laws that it be comprehensive with respect to the examination of the financial records of the Fund; that it extend, insofar as practicable, to the ascertainment that financial transactions consummated during the period under review were supported by the necessary authority; and that it determine that there was adequate and faithful accounting for the assets of the Fund. In determining the authority for financial transactions, reference was made to the Articles of Agreement, the By-Laws and Rules and Regulations of the Fund, the minutes of the Executive Board and the General Administrative Orders of the Fund. The system of accounting and the internal control were reviewed, and the work program performed by the Internal Auditor, as reported by him to the Committee, was taken into account in the audit after adequate review was made of his work performance.

Audit Certificate

We have made an independent examination of the Balance Sheet of the International Monetary Fund as at April 30, 1964, of the Statements of Income and Expenditure and of Reserves for the fiscal year then ended and of the schedules related to such financial statements. We have obtained from the officers and staff of the Fund all such information and representations as we have required in the conduct of our audit.

As a result of our examination, we report that, in our opinion, such Balance Sheet and related Statements of Income and Expenditure, together with the notes appearing thereon, present fairly the financial position of the International Monetary Fund as at April 30, 1964, and the results of its operations for the fiscal year then ended, and were prepared in conformity with generally accepted accounting principles applied on a basis consistent with that of previous fiscal years.

Audit Committee:

/s/ A. K. Mukherji, Chairman (India)

/s/ Juan Samuel Quinteros (El Salvador)

/s/ Karl Janne Walck (Sweden)

Exhibit A Balance Sheet

as at April 30, 1964

Values expressed in U.S. dollars on the basis of established parities (See Note 1)

Assets
Gold Account
Gold with depositories (See Note 2)$ 2,334,021,167
(66,686,319.064 fine ounces at $35 per ounce)
Investments (See Note 3)
$818,587,000 U.S. Government securities maturing within 12 months, at cost$799,982,369
Funds awaiting investment9,142799,991,511$ 3,134,012,678
Currencies and Securities with Depositories
Members
Currencies$ 2,670,604,501
Securities9,025,037,373
(nonnegotiable, noninterestbearing demand obligations, payable at face value by members in their currencies)
$11,695,641,874
Withdrawing member’s currency62,499,82711,758,141,701
Subscriptions to Capital—Receivable
Balances not due992,482,532
Other Assets (See Note 4)17,603,511
(receivables, accruals, prepayments, and sundry cash)
Total Assets$15,902,240,422
Capital, Reserves, and Liabilities
Capital
Authorized subscriptions of members$15,614,750,000
Withdrawing Member’s Subscription50,000,000
Reserves (Exhibit C)
Special reserve$117,524,012
General reserve116,518,698234,042,710
Provision for Potential Refunds of Stand-By Charges (See Note 5)2,258,938
Other Liabilities (See Note 4)1,188,774
(accruals, etc.)
Total Capital, Reserves, and Liabilities$15,902,240,422
Notes:

With the exception of the following currencies which, for bookkeeping purposes, are computed at provisional rates (the Tunisian dinar represents U.S. cents per currency unit; all other rates represent currency units per U.S. dollar):

Argentine peso83.0000Colombian peso9.00000Peruvian sol26.8150
Peso boliviano11.8750Indonesian rupiah315.000Tunisian dinar238.000
Brazilian cruzeiro470.000Korean won125.000Vietnamese piastre35.0000
Chilean escudo2.00000Paraguayan guaraní122.000Yugoslav dinar750.000

Excludes 11,690.596 fine ounces earmarked for members.

Made with the proceeds of the sale of 22,856,900.312 fine ounces of gold. Upon termination of the investment, the same quantity of gold can be reacquired.

The assets and liabilities of the Staff Retirement Fund are not included in this Balance Sheet.

A stand-by charge has, under certain circumstances, to be credited against the service charge for a drawing under the stand-by arrangement; the maximum amount on April 30, 1964 is $2,258,938. A portion of the stand-by charge is refundable to a member if the arrangement is canceled; the maximum amount on April 30, 1964 is $934,204.

Notes:

With the exception of the following currencies which, for bookkeeping purposes, are computed at provisional rates (the Tunisian dinar represents U.S. cents per currency unit; all other rates represent currency units per U.S. dollar):

Argentine peso83.0000Colombian peso9.00000Peruvian sol26.8150
Peso boliviano11.8750Indonesian rupiah315.000Tunisian dinar238.000
Brazilian cruzeiro470.000Korean won125.000Vietnamese piastre35.0000
Chilean escudo2.00000Paraguayan guaraní122.000Yugoslav dinar750.000

Excludes 11,690.596 fine ounces earmarked for members.

Made with the proceeds of the sale of 22,856,900.312 fine ounces of gold. Upon termination of the investment, the same quantity of gold can be reacquired.

The assets and liabilities of the Staff Retirement Fund are not included in this Balance Sheet.

A stand-by charge has, under certain circumstances, to be credited against the service charge for a drawing under the stand-by arrangement; the maximum amount on April 30, 1964 is $2,258,938. A portion of the stand-by charge is refundable to a member if the arrangement is canceled; the maximum amount on April 30, 1964 is $934,204.

/s/ Y. C. Koo/s/ P.-P. Schweitzer
TreasurerManaging Director
/s/ C. M. Powell
Comptroller and Assistant Treasurer

Exhibit B Statement of Income and Expenditure

for the year ended April 30, 1964

Income
Operational charges$ 4,850,736
Charges on balances in excess of quotas31,499,755
Other income1,581
Total Income (See Note 1)$36,352,072
Expenditure
Board of Governors$ 367,657
Office of Executive Directors
Salaries$956,715
Other compensations and benefits195,669
Travel180,3631,332,747
Staff
Salaries$4,770,520
Other compensations and benefits1,768,625
Travel1,199,0417,738,186
Other administrative expenses
Communications$297,165
Office occupancy expenses473,713
Books and printing (See Note 2)177,954
Supplies and equipment202,796
Miscellaneous (See Note 3)285,9051,437,533
Total Administrative Expenditure$10,876,123
Other expenditure
Fixed property costs$2,182,015
Contribution to The Per Jacobsson Foundation62,500
Gold handling and conversion costs219
Exchange adjustmentscr. 3342,244,400
Total Expenditure13,120,523
Net Income$23,231,549
(Transferred provisionally to General Reserve pending

Board of Governors’ action) (Exhibit C)
Notes:

Excludes income from investments amounting to $27,485,414, transferred to Special Reserve (Exhibit C).

After deduction of $61,187 for sales of Fund’s publications.

After deduction of $109,158 for food service sales.

Notes:

Excludes income from investments amounting to $27,485,414, transferred to Special Reserve (Exhibit C).

After deduction of $61,187 for sales of Fund’s publications.

After deduction of $109,158 for food service sales.

Exhibit C Statement of Reserves

for the year ended April 30, 1964

Special Reserve (See Note)
Balance, April 30, 1963$90,038,598
Add
Income from investments in U.S. Government securities for year27,485,414
Balance, April 30, 1964$117,524,012
General Reserve
Balance, April 30, 1963$93,287,149
Add
Net income for year (Exhibit B), transferred provisionally pending Board of Governors’ action23,231,549
Balance, April 30, 1964116,518,698
Total Reserves (carried to Balance Sheet)$234,042,710
Note:Represents income from investments in U.S. Government securities from November 1, 1957.
Note:Represents income from investments in U.S. Government securities from November 1, 1957.

Staff Retirement Fund

Memorandum by the Audit Committee

June 23, 1964

To the Managing Director and the Executive Directors

International Monetary Fund

The report of the Audit Committee, dated June 23, 1964, submitted through you to the Board of Governors, on the audit of the financial records and transactions of the International Monetary Fund for the fiscal year ended April 30, 1964, includes the following paragraphs relating to the scope of the audit conducted, the investments held, and the audit certificate given with respect to the Staff Retirement Fund:

Scope of the Audit

An examination was made by the Audit Committee of the separate accounts and financial statements relating to the Staff Retirement Fund for the fiscal year ended April 30, 1964. In the course of the examination, the Committee referred to the Articles of the Staff Retirement Plan and to the decisions of the Pension, Administration and Investment Committees created under the Plan. The Audit Committee made what it considered an adequate test check of the various classes of transactions, taking into account the audit coverage made by the Internal Auditor as reported by him to the Committee. The report of the Internal Auditor, among other audit activities conducted by his staff, showed that a detailed examination had been made of the Participants’ Accounts.

Investments

A confirmation was received by the Audit Committee directly from the depository concerning the investments held by it as at April 30, 1964 as custodian for the International Monetary Fund Staff Retirement Fund. The holdings of the various classes of investments and the limiting percentages prescribed by the Pension Committee for this purpose are indicated in the statement below. The Pension Committee decided in its meeting 63/1 on January 15, 1963 that the limiting percentages are to be determined not with reference to the book value of the investments as in the past but with reference to “original investment” defined as book value adjusted to exclude the effect of realized gains and losses. The actual percentages on the basis of book value of investments as well as on the basis of “original investment” are indicated below:

Authorized

Percentage
Actual

Percentages

on the

Basis of

Book

Value
Actual

Percentages

on the

Basis of

“Original

Investment”
Book Value“Original

Investment”
Bonds:
U.S. GovernmentMinimum 3035.8737.91$ 4,775,206$ 4,947,230
International Bank for Reconstruction and DevelopmentMaximum 2011.9712.691,593,8911,655,945
Corporate (other than convertible)Maximum 2515.3715.872,045,5812,071,348
Corporate (convertible)Maximum 5
Corporate stocksMaximum 3536.7933.534,898,0374,375,429
100.00100.00$13,312,715$13,049,952

It is observed that decisions regarding the buying and selling of investments had been made by the Investment Committee after giving due consideration to the advice of the Investment Consultant.

Audit Certificate

As a result of our examination of the separate accounts and financial statements relating to the Staff Retirement Fund for the fiscal year ended April 30, 1964, we report that, in our opinion, the Balance Sheet, the Statement of Source and Application of Funds, and the related Schedules in respect of Participants’ Account, Accumulation Account, Retirement Reserve Account, and Reserve Against Investments, present fairly the financial position of the Staff Retirement Fund as at April 30, 1964 and the results of its operations for the fiscal year then ended, and were prepared in conformity with generally accepted accounting principles applied on a basis consistent with that of previous fiscal years.

Audit Committee:

/s/ A. K. Mukherji, Chairman (India)

/s/ Juan Samuel Quinteros (El Salvador)

/s/ Karl Janne Walck (Sweden)

Exhibit I Staff Retirement Fund Balance Sheet

as at April 30, 1964

Assets
Cash at Banks$ 7,843
Investments
Bonds, at amortized value
United States Government (market value, $4,706,286)$4,775,206
International Bank for Reconstruction and Development (market value, $1,602,668)1,593,891
Corporate (market value, $1,889,799)2,045,581$8,414,678
Corporate stocks (common), at cost (market value $7,389,435)4,898,03613,312,714
Accrued Interest on Bonds139,299
Accrued Contributions from Participants and Employer49,589
Total Assets$13,509,445
Liabilities and Reserves
Participants’ Account$ 2,970,900
Accumulation Account9,137,987
Retirement Reserve Account1,137,796
Reserve Against Investments262,762
Total Liabilities and Reserves$13,509,445
/s/ Y. C. Koo/s/ P.-P. Schweitzer
TreasurerManaging Director
/s/ C. M. Powell
Comptroller and Assistant Treasurer

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