BUDGET COMMITTEE TAKES UP $7.4 BILLION PROPOSAL FOR 2008/09 PEACEKEEPING, BOARD OF AUDITORS REPORT ON 2006/07 PEACEKEEPING FINANCIAL STATEMENTS
With the total United Nations annual peacekeeping budget reaching a record $7.4 billion in 2008/09, speakers in the Fifth Committee (Administrative and Budgetary) this morning stressed the need for Member States to pay their peacekeeping assessed contributions in full, on time and without conditions, so that those missions could fully carry out their mandates.
The Committee was taking up a number of reports on proposed budget levels for 2009/09 peacekeeping; an overview and performance reports for past years; cross-cutting issues, such as conduct and discipline, best practices, training and internal oversight; and an audit of the financial statements of peacekeeping operations for 2006/07.
Introducing the overview on the financing of peacekeeping operations and the proposed 2008/09 budget, Warren Sach, the United Nations Controller, told the Committee that the total United Nations peacekeeping budget level for the 2008/09 period was at $7.4 billion, including the budgets for the Support Account and the United Nations Logistics Base at Brindisi, Italy. The amount represented an increase of $629.3 million, or 9.3 per cent, over the approved peacekeeping budget of $6.7 billion for the period 1 July 2007 to 30 June 2008, primarily attributable to the establishment of the African Union-United Nations Hybrid Operation in Darfur (UNAMID) and the United Nations Mission in the Central African Republic and Chad (MINURCAT).
Introducing the report of the Board of Auditors, Bernard Levallois, Chairperson of its Audit Operations Committee and Director of External Audit of France, said that the audit had been carried out through field visits to 14 active missions, the Logistics Base, as well as a review of peacekeeping financial transactions and operations at Headquarters, including the peacekeeping reserve fund, the Support Account and 24 closed missions. He added that assessed peacekeeping contributions outstanding as at 30 June 2007 amounted to $1.26 billion. Closed missions accounted for $550.29 million, or 43.63 per cent, of that amount, which included significant portions that had long been outstanding. Of the amount of $5.15 billion shown as expenditures, $973.5 million represented unliquidated obligations. However, several instances had been noted where the criteria for creating obligations had not been strictly observed.
He said the Board’s evaluation showed that a number of criteria set out by the General Assembly in relation to the creation of posts had neither been highlighted nor emphasized in the instruction for the proposed budget for the Support Account for 2008/09. Several instances had also been noted where the staff appraisals of personnel financed under the support account did not contain adequate information to be able to assess the extent of their involvement in peacekeeping activities. Also, several missions were not in full compliance with the requirements of results-based budgeting.
The representative of China, speaking on behalf of the “Group of 77” developing countries and China, noted with concern that outstanding assessed contributions had increased by 2.7 per cent to $697.3 million at the end of the current fiscal year, and warned that peacekeeping operations could not succeed without adequate funding. He emphasized that all Member States should pay their dues in full.
Regarding two emphases made by the Board on the financial statements under review, he expressed concerned about the level of cancellation of unliquidated obligations totalling $202.28 million and shared the concerns of the Board and the Advisory Committee on Administrative and Budgetary Questions (ACABQ) that the high incidence of cancellation of prior periods’ obligations might be indicative of an overstatement of expenditures in previous years. He was also concerned about significant discrepancies in the system of asset management at various missions, and concurred with the recommendation of the Board of Auditors that the Secretariat needed to place greater emphasis on monitoring the creation of unliquidated obligations at the close of the financial year.
The representative of Slovenia, speaking on behalf of the European Union, said it was of the utmost importance that all Member States pay their contributions in full, on time and without conditions, in order for peacekeeping operations to fully carry our their mandates. The Union was concerned about the total outstanding assessments of $1.26 billion. The level had remained almost unchanged compared to 2005/06, and the persistent negative impact on cash flows was obvious.
He also stressed the importance of implementation of the recommendations of the Board of Auditors and called on the Secretariat to implement outstanding recommendations, especially those of high priority and those that were “ageing”. Last year, the Union had expressed its concern on the number of cancellations of prior-year unliquidated obligations, and it shared the concerns of the Board of Auditors and ACABQ that the situation might be indicative of an overstatement of expenditures in previous years.
Canada’s representative, who also spoke on behalf of Australia and New Zealand, said that, with the peacekeeping budget constantly increasing, Member States needed to support the functioning of those missions. Noting the serious number of outstanding assessments, he urged all Member States to pay their dues on time, in full and without conditions. He also expressed the belief that the Secretary-General’s proposals on the consolidation of peacekeeping accounts could contribute to quick reimbursement to countries contributing troops and police contingents.
The representative of the Republic of Korea said that, with the peacekeeping budget far exceeding the regular budget of the United Nations, improvement of the budget efficiency of peacekeeping activities was the most important target for review during the Committee’s resumed session. In order to enhance productivity of the peacekeeping budget appropriation, it was necessary to capture both the micro- and macro-perspectives. The micro-perspective involved financial and managerial efficiency of peacekeeping operations themselves; and the macro-perspective related to the context of peacekeeping efforts, comprising pre-peacekeeping operation, ongoing peacekeeping operation and post-peacekeeping operation phases. Structured linkage among those three phases could reduce the long-term total costs.
The United States representative said that, at a time of escalating expenses associated with the multiple and varied activities of the Organization, it was imperative that every effort be made to maximize the effective use of available resources. A record number of almost 110,000 military and civilian peacekeepers were deployed in the field and the Committee would examine and adopt proposed budgets for current missions totalling well over $7 billion, almost twice the level of the 2008-2009 biennium regular budget.
The cross-cutting issues that the Committee would be considering were integral to successful mission management and operations, and merited careful consideration by the Committee, he said. Those important thematic issues should be fully assessed and reflected in what would be the Committee’s fourth annual cross-cutting resolution.
Also speaking today were the representatives of Brazil (on behalf of the Group of 77 and China), Mexico (on behalf of the Rio Group), Japan, Bangladesh and the Russian Federation.
Other reports before the Committee were introduced by the Chairperson of ACABQ, Susan McLurg; the Under-Secretary-General for Internal Oversight Services, Inga-Britt Ahlenius; and the Chief of the Accountability and Oversight Support Service of the Department of Management, Nancy Hurtz-Soyka.
The Committee will meet again at 10 a.m. Friday, 9 May, to hear the Secretariat statement on the financial situation of the United Nations.
Background
The Fifth Committee (Administrative and Budgetary) met this morning to consider the Board of Auditors’ report on peacekeeping financing, as well as a series of documents on peacekeeping cross-cutting issues.
The first document before the Committee was a report of the Board of Auditors on the accounts of the United Nations peacekeeping operations for the financial period ended 30 June 2007 (document A/62/5, vol. II, chap. II). The audit involved field visits to 14 active missions and the United Nations Logistics Base at Brindisi, Italy, and a review of peacekeeping financing at Headquarters, including the Peacekeeping Reserve Fund, the Support Account and 24 completed missions.
According to the document, the Board of Auditors issued a modified audit opinion on the financial statements for the period under review, with two emphases of matter. The first one relates to the cancellation of unliquidated obligations in the amount of $202.28 million, reflected as savings on cancellation of prior-period obligations. The second one relates to the amount of $1.38 billion, representing the original cost of non-expendable property. Significant discrepancies were noted when the results of physical counts were compared with the balances shown in the asset records, indicating deficiencies in the system of asset management in various missions. Similar deficiencies were observed in relation to unused expendable property.
The Board is also concerned about the financial position of completed missions. Their total cash balances amounted to $536.63 million, while total liabilities amounted to $503.95 million. However, there were outstanding assessments totalling $550.29 million. Should these assessments remain uncollected, eight missions would have an accumulated cash deficit of $199 million.
The Board recommends, among other things, that an effective system of inventory management be implemented and that the missions in Haiti, the Democratic Republic of the Congo and Liberia, as well as the United Nations Logistics Base, conduct a physical inventory and reconciliation of all expendable property, update the Galileo system and ensure that the records are accurate. The Administration should consider disclosing the value of unused expendable property in preparation for the implementation of the International Public Sector Accounting Standards (IPSAS).
The Board continues to pay close attention to procurement and contract management and has commented extensively on systems contracts, procurement lead times, delegation of authority, vendors’ performance and liquidated damages, vendors’ performance reports, procurement staff and filing systems, and reviews by the Headquarters Committee on Contracts. It also points out that aviation safety inspections are of paramount importance, forming “the basis for identifying the remedial action needed to enhance aviation safety and prevent accidents”. However, of the 25 aviation safety surveys planned for the period under review, only 12 were conducted, owing to the inadequate staffing and travel budget of the Aviation Safety Section.
Having reviewed the audit coverage of peacekeeping operations by the Office of Internal Oversight Services (OIOS), the Board of Auditors notes that, for 2006, only 86 of the 201 audits planned were undertaken and completed by the end of the year, while 46 audits were ongoing. The Board also expresses concern about vacant resident auditor posts.
According to the Secretary-General’s report on the implementation of the recommendations of the Board of Auditors (document A/62/784), the implementation of 15 main recommendations is in progress, of which 9 are targeted for implementation before the end of 2008 and 1 for implementation by the first quarter of 2009. Of the 5 main recommendations for which no target date has been set, 2 pertain to ongoing activities, 1 is to be determined and full implementation of 2 recommendations is dependent on factors that are beyond the Secretariat’s control. A system of inventory management is to be implemented by the fourth quarter of 2008, and inventory activities in the missions are ongoing.
In response to the recommendation that the Administration consider disclosing the value of unused expendable property in preparation for the implementation of IPSAS, the Secretary-General states that neither the financial regulations and rules nor the United Nations system accounting standards require such disclosure and that considerable administrative resources would be required to gather and maintain data, combined with modifications of systems and procedures. Such disclosure would be appropriate when financial statements that are in compliance with IPSAS are prepared in the future.
In connection with the recommendation “to ensure that integrated mission planning process guidelines are finalized and made fully operational as soon as possible”, the Secretary-General notes that guidelines are under review, that integrated mission planning process training modules for Headquarters and field personnel will be subsequently developed and that draft guidelines will be finalized during the third quarter of 2008.
In connection with the recommendation that the Administration re-examine the provisions of the 1990 report on the Support Account, the Secretary-General responds that, in February 2008, all departments and offices funded from the Account were requested to review its criteria, bearing in mind the context in which they were set out at the time of ad hoc backstopping of peacekeeping, prior to the Support Account’s formal establishment.
The Advisory Committee on Administrative and Budgetary Questions (ACABQ), in a related document (A/62/823), commends the Board for its report and notes that the report on the implementation of its recommendations was available only after ACABQ had concluded its hearings on the matter.
The Advisory Committee shares the Board’s concern that high incidence of cancellation of prior-period obligations may be indicative of an overstatement of expenditures in previous years. It is also concerned over the discrepancies between the results of physical asset counts and the balances shown in the records.
As liabilities for after-service health insurance have only been reflected in the financial statements of peacekeeping operations since 30 June 2007, the Board intends to follow up on the matter in the context of its 2007/08 audit. ACABQ requests that this follow-up include a review of how such liabilities would be presented in the context of the implementation of IPSAS. Also, noting that missions benefit from significant in-kind contributions from host Governments and others, ACABQ requests that the Board of Auditors review the matter in the context of its next report on peacekeeping operations.
With several Electronic Performance Appraisal System (e-PAS) records reviewed by the Board indicating that some of the staff activities are not directly related to peacekeeping, the Advisory Committee further emphasizes the need to ensure that Support Account resources are utilized only for peacekeeping operations. It also looks forward to the conclusion of a review of the criteria that may hamper efficient management of the Support Account, as well as any related proposals by the Secretary-General.
Noting the Secretariat’s explanation concerning the resource implications of taking a full inventory and updating databases, ACABQ states that disclosure of the value of expendable property should not depend on the type of system in place. Instead, it should be considered a prudent management practice aimed at maximizing controls and minimizing risk. The Committee recommends that the Secretariat take steps to strengthen control of expendable and non-expendable equipment and requests the Board of Auditors to continue its review of inventory management of equipment and vehicle spare parts.
ACABQ’s other recommendations relate to internal controls to mitigate the risk regarding missions’ fuel consumption, peacekeeping procurement, rations spoilage and air safety. In particular, the Advisory Committee stresses the importance of regular inspections and notes that the Board of Auditors has raised a number of issues relating to non-compliance with established procedures on transportation of non-United Nations personnel, including cost reimbursement. Expeditious measures should be taken to respond to the concerns raised by the Board in that regard.
Finally, the Advisory Committee is very concerned that, as a result of the continued high rate of resident auditor vacancies, audit activities, in particular at large and complex missions, have been curtailed and that OIOS is, therefore, unable to provide oversight services to missions, as envisaged.
According to the Secretary-General’s overview of the financing of the United Nations peacekeeping operations: budget performance for the period from 1 July 2006 to 30 June 2007 and budget for the period from 1 July 2008 to 30 June 2009 (document A/62/727), total expenditure in 2006/07 amounted to $5.2 billion, against a total approved budget of $5.4 billion, exclusive of budgeted voluntary contributions in kind. For 2008/09, peacekeeping financial resources are estimated at $7.4 billion, compared with the approved level of $6.7 billion for the period from 1 July 2007 to 30 June 2008. That 9.3 per cent increase is primarily attributable to the establishment of the African Union-United Nations Hybrid Operation in Darfur (UNAMID) and the United Nations Mission in the Central African Republic and Chad (MINURCAT).
Currently, the report states, there are 17 ongoing peacekeeping missions, to which 119 countries are contributing military and police personnel. Together, they have 88,706 military and police, and 28,727 civilian staff. Similarly, there are 17 ongoing political and peacebuilding missions with 551 military and police personnel and 3,997 civilian staff.
The report notes that the scope of peacekeeping activities has dramatically increased since 2002/03, with the number of military personnel in peace operations growing by 146 per cent, from 36,000 in 2002/03 to a projected 88,706 in 2008/09. The range of peacekeeping activities has also broadened, with the establishment of larger, more complex, integrated and multidimensional missions. Between 2002/03 and 2008/09, the total peacekeeping budget level is anticipated to triple, although the number of active peacekeeping missions for 2008/09 will increase by only three missions. The number of special political and peacebuilding missions for which the Department of Peacekeeping Operations and Department of Field Support provide support has increased from 12 in 2002 to 17 in 2008. The total budget level for special political and peacebuilding missions has also risen, from $37.1 million in 2002 to $386.6 million in 2008.
To meet mandates, the Department of Peacekeeping Operations and the Department of Field Support are implementing reforms initiated in 2005 with the launch of Peace Operations 2010, which identified five components essential to successful peace operations: personnel; doctrine; partnerships; resources; and organization. In 2008/09, the Departments intend to undertake an evaluation of the restructuring.
The report states that, in response to the ACABQ recommendations with regard to the budget process, the Department of Field Support has launched two new initiatives: the first one, Abacus, provides for the fielding of budget teams from Headquarters to missions to assist with budget preparation. The second, Programme for an Advanced Compendium of Trainees (PACT), seeks to strengthen the capacity of mission budget offices through accelerated encumbering of field budget posts with well-trained personnel. In addition, elements of cost-accounting principles were applied in the preparation of peacekeeping budgets, in particular start-up budgets for the new missions; and mechanisms were introduced for cost recovery from outside users for services provided to them.
With regard to air operations, the report states that the Department of Field Support and the World Food Programme (WFP) has been working on an agreed set of common aviation standards that could be used as a benchmark for using each other’s air assets to achieve economies in joint areas of operation. To enhance economies and efficiencies, resource reviews has been conducted in the United Nations Organization Mission in the Democratic Republic of the Congo (MONUC), United Nations Mission in the Sudan (UNMIS), United Nations Operation in Côte d’Ivoire (UNOCI) and the United Nations Mission in Liberia (UNMIL), which account for more than two thirds of the United Nations overall fleet. Efforts to broaden that review have been suspended owing to a shortage of staff in the Air Transportation Section of the Department of Field Support. In addition, a Strategic Air Operations Centre is being set up at the Logistics Base to undertake monitoring and tracking of all aircraft engaged in passenger and cargo airlifts by United Nations.
With regard to management initiatives, the report notes that an Office of Rule of Law and Security Institutions was established in July 2007 in the Department of Peacekeeping Operations. Over the past year, the Department of Peacekeeping Operations and the Department of Field Support has sought to put in place partnership frameworks that can support and facilitate operational engagement with United Nations and non-United Nations partners. In the coming year, the Departments will strengthen work with existing and potential partners. Frameworks for cooperation are already in place with the African Union and the European Union, while the Departments are working to put in place framework arrangements for cooperation in post-conflict contexts with the World Bank and the North Atlantic Treaty Organization (NATO).
The Secretary-General’s budget proposals for 2006/07 introduced the concept of efficiency gains in which fewer inputs, or the same inputs at a lower cost, are needed to produce the same output level as in the previous financial period. Efficiency gains for 2006/07 totalled some $17 million, and for 2007/08 some $35 million. In 2008/09, efficiency gains are expected to be derived from improvements in the way the missions are supported. Overall, efficiency gains estimated at $44.1 million has been identified in all missions.
On the Peacekeeping Reserve Fund (a cash-flow mechanism to ensure rapid deployment of missions), the report states that the level of the Fund as at 30 June 2007 was $161.9 million, comprising the reserve of $150 million and an accumulated surplus of $11.9 million. During the period ended 30 June 2007, short-term loans were made to the United Nations Integrated Mission in Timor-Leste (UNMIT), which were paid upon receipt of assessments. As at 30 June 2007, there were two outstanding loans: $12.8 million to the United Nations Mission in the Central African Republic (MINURCA), and $3 million to the United Nations Mission in the Central African Republic and Chad (MINURCAT). The balance of the Peacekeeping Reserve Fund in excess of the authorized level that is available to meet the financing of the peacekeeping support account for the period from 1 July 2008 to 30 June 2009, subject to General Assembly approval, will be provided in the context of the Support Account performance report for 2006/07.
In 2007, says the report, payments to troop contributors could not be effected for the United Nations Mission for the Referendum in Western Sahara (MINURSO) and the United Nations Interim Administration Mission in Kosovo (UNMIK) because of poor cash position in their special account, primarily resulting from the low level of receipt of assessed contributions, with liabilities for troop costs currently covering the period from April 2002 to January 2008 (MINURSO) and January 2005 to December 2007 (UNMIK). When necessary, loans have been made from closed missions to UNMIK, MINURSO and other active missions to cover immediate cash operating requirements.
A note by the Secretary-General on proposed budgetary levels for peacekeeping operations for the period from 1 July 2008 to 30 June 2009 (document A/C.5/62/28) transmits an annex reflecting the proposed budget levels for peacekeeping operations, the United Nations Logistics Base at Brindisi, Italy, and the Support Account for Peacekeeping Operations.
The Secretary-General’s comprehensive report on conduct and discipline (document A/62/758), reviews the functions assigned to the Conduct and Discipline Unit and Teams, the extent to which they have assisted in the implementation of the comprehensive strategy initiated by the Special Committee on Peacekeeping Operations and the elements of the strategy that are currently under implementation. It also identifies a set of recurrent routine operational functions resulting from the comprehensive strategy, and covers the five special political missions with a conduct and discipline presence.
According to the report, allegations of misconduct totalling 803 (including 357 allegations of sexual exploitation and abuse) and 748 (including 127 allegations of sexual exploitation and abuse) were received in 2006 and 2007, respectively, for all peacekeeping personnel. The most prevalent forms of misconduct involving staff in missions concerned fraud (including petty fraud), theft, harassment (including sexual), abuse of authority, mismanagement, misuse of the Organization’s assets and traffic-related violations. Significant forms of misconduct by uniformed peacekeeping personnel were harassment, assault, excessive use of force, unlawful discharge of weapon and traffic violations. Incidence of sexual exploitation and abuse was significantly lower in 2007, with 127 cases reported, than in 2006, when 357 cases were reported.
The report seeks approval of the principle of converting all conduct and discipline positions to posts for the 2008/09 period. The Secretary-General reasons that the functions performed by the units are ongoing and fully integrated into the mandate and operations of the Department of Peacekeeping Operations and the Department of Field Support and are not to be considered temporary in nature. In recognition of the ongoing nature of the function and the sense that the term “team” denotes something temporary, the Secretary-General also proposes that the nomenclature “Conduct and Discipline Unit” (rather than “Conduct and Discipline Team” in the field) be used for both Headquarters and the missions.
A report of the Secretary-General on peacekeeping best practices (document A/62/593 and Corr.1) describes the methodology and tools that have been used for managing best practices in peacekeeping operations since the introduction of a new system for those activities in 2005. In 2007, the Peacekeeping Best Practices Section, the Integrated Training Service and a new evaluation capacity were regrouped into a single division: the Policy, Evaluation and Training Division, which supports both the Department of Peacekeeping Operations and the Department of Field Support. The new system links identification and sharing of best practices in the field to the development of guidance materials (policies, guidelines and procedures) that reflect those lessons. The guidance materials form an institutional doctrine that is disseminated through training programmes, electronic means and Best Practices Officers in missions.
The report also includes an initial assessment of the early impact of the system, highlighting resulting improvements in efficiency, effectiveness and mission planning. The tools developed since 2005 have helped staff in the field carry out their functions more efficiently, as seen in recent development of a policy directive on quick-impact projects by the Department of Peacekeeping Operations; and the use of the draft mission start-up field guide by managers involved in planning for UNAMID and those working in Darfur during the mission start-up phase. That guide is expected to be published in spring 2008.
The report provides detailed information on the development of processes to link lessons learned to guidance and doctrine, as well as on enabling technologies such as the Best Practices Toolbox, peace operations Intranet and the communities of practice, which are facilitated e-mail networks that connect specialists with their counterparts in other missions. The Secretary-General also addresses the impact to date of the best practices system, providing information on outputs, the results of a survey of field personnel, illustrative examples of improvements in efficiency and effectiveness, and contributions of best practices to mission planning.
In a note on the comprehensive report on training in peacekeeping (document A/62/676) the Secretary-General informs the Assembly that, for a number of reasons, he was unable to submit that document for the second part of the resumed sixty-second session, as requested by the Assembly.
The Secretary-General notes that the division of the Department of Peacekeeping Operations into two departments in 2007 was the catalyst for a full review of the priorities and focus of activities of the Integrated Training Service and that a training strategy for the Service was formulated and widely discussed, but has not yet been approved. The Secretary-General indicates that further work is needed to finalize and implement the new strategy, as well as to conduct and validate the findings of a comprehensive training needs analysis. It is expected that the complete report on training in peacekeeping will be submitted for consideration by the General Assembly at its resumed sixty-third session.
ACABQ, in its report (document A/62/781), welcomes the inclusion of new sections on efficiency gains and planning assumptions in the budget proposals, but suggests that planning assumptions be included closer to the beginning of future budget reports, since it provides a useful overview. The Advisory Committee also recommends that information on cost-sharing arrangements for seconded posts be included in future budget proposals for integrated missions.
While recognizing ongoing efforts to improve budget formulation in accordance with results-based frameworks, ACABQ regrets that the quality of the budget presentations remains uneven. Expected accomplishments, indicators of achievement and outputs should demonstrate consistency. For example, in some cases, a number of expected accomplishments are too broad and go beyond what can realistically be accomplished by the missions themselves. The Secretariat should continue to improve the results-based budgeting presentation, including by linking the frameworks more closely to resources requested.
On the posts devoted to the budget process in the field (103) and at Headquarters (36 posts in the Department of Field Support and 48 in the Department of Management), the Advisory Committee states that their functions should specifically include ensuring budget discipline and improving coordination. Despite the allocation of significant resources, the system is not working well. The fact remains that there are two substantial units in the Department of Peacekeeping Operations and the Department of Management deeply engaged in preparing the same product. In this connection, the Advisory Committee recalls the observations of OIOS that those Departments take immediate steps to reorganize the budget process and consolidate budget functions.
While not objecting to the Abacus initiative, ACABQ notes that it is not a long-term solution or a substitute for well-trained staff in the missions. In this respect, the Department of Field Support has instituted a programme for an advanced compendium of trainees to staff mission budget offices and to address their high vacancy rate. This year, the Department has also begun an on-the-job training programme for recent recruits. The Advisory Committee recommends that the Assembly request the Secretary-General to assess the effectiveness of this initiative.
Budget implementation should be judged in the context of efficiency in the use of resources and the achievement of objectives set out in the results-based budgeting framework, rather than a high budget implementation rate, the report states. In this context, a distinction must be made between savings and underexpenditures, which may be a reflection of delays in or non-implementation of programmed activities. Agreeing with the Board of Auditors on the high level of cancellations, the Advisory Committee notes that this may lead to an over-assessment of Member States. Efforts should be made to further reduce unliquidated obligations and to establish realistic vacancy rates when costing contingents, posts and positions, so as to avoid over-assessment. Future budgets should include an explanation of vacancy factors of over 25 per cent for continuing posts and positions, and a time frame for reducing vacancies.
The report also contains requests that resource requirements be based on specific mandates of each mission and that further information be provided on the approach to be taken during the drawdown phase of missions and planning for the transfer of functions to other entities. The Advisory Committee also emphasizes the importance of adequate and continuous oversight in field missions, stressing the need for OIOS to respond expeditiously to new developments that alter the risk profile of missions. In this context, ACABQ notes with concern the high vacancy rate for OIOS resident auditors and agrees with the recommendation that OIOS expedite the filling of all such posts. The Committee recommends analysing the causes and effects of the very high rate of turnover of resident auditors to identify measures to mitigate the problem.
The Advisory Committee further notes the positive impact of temporary deployment of experienced officers (“tiger teams”) in dealing with the problem of high vacancy rates in many missions, but observes that their deployment is costly and is not a long-term solution. It favours enhanced delegation of authority to mission officials with regard to recruitment, which should be accompanied by appropriate steps to ensure accountability. With respect to facilitating civilian staffing in peace operations, the Committee underscores the importance of streamlining contractual arrangements and harmonization of conditions of service now under consideration in the Assembly. ACABQ also reaffirms its previous recommendation that the Secretariat enhance the recruitment at all levels of candidates with the appropriate language skills.
Commenting on the work carried out by best practices sections, ACABQ recognizes the importance of sharing lessons learned, but cautions against assigning a disproportionate importance to the process of developing best practices at the expense of actual tasks to which a practice relates. It is concerned that personnel with important substantive tasks may spend precious time complying with reporting requirements. Lessons may be learned in many ways, and some of them may be quite informal, as evidenced by the apparent success of communities of practice. Care should be taken to ensure that the codification of best practices does not stifle creativity in problem-solving by prescribing standard procedures that may not be appropriate in all environments.
On another issue, the Advisory Committee points out that the goal of conduct and discipline activities should be the creation of a new culture in which misconduct is eliminated. While some progress has been achieved, improvements may be partially attributed to media coverage and the activities of OIOS, non-governmental organizations and other actors. Whatever the cause, it points to the possibility that the United Nations could be faced with a need for fewer conduct and discipline personnel in the future. Two major issues that may have an impact on conduct and discipline activities -- strengthening of investigations and the internal system for the administration of justice -- are awaiting a decision by the Assembly. Furthermore, a fundamental set of standards of conduct has been recently incorporated in the model Memorandum of Understanding between the United Nations and troop-contributing countries, along with an undertaking by Governments to enforce those standards. This development could mean that some aspects of the work of the conduct and discipline teams would be shifted to the Governments or other entities.
With the conduct and discipline function in peacekeeping still evolving, the Advisory Committee is of the view that it is prudent to retain some temporary staff as part of the Conduct and Discipline Unit/Teams at this time. Accordingly, it recommends against approval of the Secretary-General’s proposals to convert all conduct and discipline positions funded under general temporary assistance to posts, as well as the proposed change in nomenclature for the Conduct and Discipline Teams in the field.
On training, the Advisory Committee was informed that the Integrated Training Service sees its role as that of a small centralized service that focuses on setting training standards and ensuring that they are met, developing training policies, providing oversight for peacekeeping training activities and providing guidance to specialist trainers, as well as developing training in certain cross-cutting areas. In view of the capacity of the Service (33 staff) in relation to the magnitude of the need (some 200,000 peacekeepers), ACABQ considers this to be a practical approach.
ACABQ recommends that the report on training be completed as soon as possible, but not later than at the main part of the sixty-third session. It should include clear criteria for the holding of training courses, with a focus on reducing the costs of travel for training, guidelines regarding the use of in-house expertise versus consultants to carry out training, information on the languages used for training and a concept for the allocation of training resources among civilian, military and police personnel. The Advisory Committee also expects that the report will provide information concerning expected benefits to be derived through training, including efficiency gains.
According to the report on the activities of OIOS in 2007 (document A/62/281, Part II), the Office issued 154 oversight reports related to peace operations, which accounted for 54 per cent of all recommendations put forward during that period. The recommendations highlighted four risk areas: governance, compliance, and financial and operational risks. While overall resources dedicated to peace operations remained at a similar level in 2007, a new OIOS presence was established in the United Nations Interim Force in Lebanon (UNIFIL) and UNMIT, while the Office’s presence in the United Nations Operation in Burundi (ONUB) was phased out. OIOS also expanded its presence in MONUC.
Between 1 January and 31 December 2007, a total of 469 allegations were received by the OIOS Investigations Division pertaining to staff involved in peace operations, comprising nearly two thirds (65 per cent) of all allegations received. After an evaluation, 134 (or 29 per cent) were assigned to an OIOS investigator, 108 (or 23 per cent) referred to other Departments/Offices for investigation, 65 (or 14 per cent) were filed for information, and other action was taken on the remaining 162 (or 34 per cent). In total, 87 investigation reports were issued.
The report adds that approximately 50 per cent of the work of the Procurement Task Force in 2007 dealt with procurement irregularities in United Nations peacekeeping missions. During the period, the Task Force received 75 referrals of procurement irregularities related to peacekeeping operations, all of which have been assigned for investigation. A total of 66 procurement cases were closed, and 13 reports related to peacekeeping missions were issued in 2007. Those reports concerned multiple vendors, vendor intermediaries and agents, as well as United Nations staff members. Investigations by the Task Force resulted in suspension and removal of 24 vendors.
The report also summarizes select findings from audits of various peacekeeping missions with regard to the four risk categories particularly prevalent in the current United Nations work environment.
A related note by the Secretary-General (document A/62/281, Part II, Add.1) provides comments on issues which the Administration considers require clarification. It states that, contrary to paragraph 18 of the report, the Secretary-General did not approve any exceptions to the application of the Financial Regulations and Rules of the United Nations with regard to UNAMID. The Secretary-General did, however, approve a number of measures that fall within his authority and that can be invoked under certain special circumstances. The note also provides clarification with regard to paragraph 30, in which OIOS highlights three main issues with regard to the preparation of results-based budgeting frameworks.
Board of Auditors’ Reports
The Board’s report was introduced by the Chairman of the Audit Operations Committee of the Board of Auditors, BERNARD LEVALLOIS, Director of External Audit, France.
He said assessed contributions outstanding as at 30 June 2007 had amounted to $1.26 billion, compared with $1.27 billion as at 30 June 2006, a slight decrease, he said. Closed missions accounted for $550.29 million, or 43.63 per cent of the outstanding amount, significant portions of which were long outstanding. The Administration had continued with its previously stated policy of not making a provision for delays in the collection of outstanding assessments. The Board maintained its previously held view that such a provision would ensure that the amount shown as accounts receivable would be more realistically stated, and urged the Administration to keep that matter under review. Of the amount of $5.15 billion shown as expenditures, $973.5 million represented unliquidated obligations. However, several instances had been noted where the criteria for creating obligations had not been strictly observed.
The Administration had provided in the financial statements the sum of $389 million as a liability for after-service health insurance, he said. Previously, such a liability had been disclosed in the notes to the financial statements. While welcoming that improvement, the Board of Auditors had noted that the figure had been arrived at through a combination of actuarial valuation as at 31 December 2005, management’s projection to 30 June 2007 and the apportionment of 15 per cent to peacekeeping.
Notwithstanding the fact that the Administration’s report on the Peacekeeping Support Account was not available, he said, the Board had undertaken its own evaluation, and noted that a number of criteria set out by the Assembly in relation to the creation of posts had neither been highlighted, nor emphasized in the instruction for the proposed budget for the Support Account for 2008/09. Several instances had also been noted where the staff appraisals of personnel financed under the Support Account did not contain adequate information to be able to assess the extent of their involvement in peacekeeping activities. Also, several missions were not in full compliance with the requirements of results-based budgeting.
Among other things, he said, the Board had noted that the Local Property Survey Board and the Headquarters Property Survey Board had not acted promptly on cases brought to their attention for write-offs and disposals. For example, at MINURSO, 1,341 items recommended for write-off were still pending with the Local Property Survey Board. There had been delays in conducting quarterly inspections of contingent-owned equipment at UNMIS, and that was likely to adversely impact on the reimbursements to troop-contributing countries. Delays in issuing purchase orders for the procurement of goods and services at UNOCI and MONUC ranged from 91 to 360 days from the dates of approval of related requisitions. In response to shortcomings identified in previous audits, the Administration was to have introduced a rations management system in June 2006, but, as of October 2007, that system had not yet been implemented. It was necessary to improve storage of rations at UNMIL, United Nations Stabilization Mission in Haiti (MINUSTAH) and the United Nations Disengagement Observer Force (UNDOF). At the time of the audit, 142,247 ration packs valued at $1.03 million had spoiled.
The Secretary-General’s report on the implementation of the Board’s recommendations was introduced by NANCY HURTZ-SOYKA, Chief of Accountability and Oversight Support Service, Department of Management, on behalf of Alicia Bárcena, Under-Secretary-General for Management. With regard to prioritization, the Secretary-General had taken note of the 24 main recommendations that the Board had highlighted in its report. While emphasizing that implementation of all recommendations needed to be treated as a priority, the main recommendations had been designated as high priority, and the others as medium priority.
The Board, in annex II to its report, had also highlighted 39 recommendations from prior periods as partially implemented, and two as not implemented, she said. As requested by the Assembly, information was provided in the Secretary-General’s report on progress to date, the department responsible, current status, priority and revised target dates on each of those recommendations.
Chairperson of ACABQ, SUSAN MCLURG, introduced that body’s report. She noted the Secretariat’s response that neither Financial Regulations and Rules nor the United Nations System Accounting Standards required disclosure of the value of unused expendable property in preparation for the implementation of IPSAS and that considerable resources would be needed to collate and manage related data. Nonetheless, the Advisory Committee believed that the Secretariat should take steps to strengthen control of expendable and non-expendable property.
She said the Board of Auditors had pointed out that the Administration had agreed, in light of changing circumstances and needs to revisit the provisions of the report of the Secretary-General on the support account (document A/45/493), to determine which criteria might hamper efficient management of the Support Account. ACABQ looked forward to the conclusion of that review and any related proposals that might be presented to the Assembly by the Secretary-General.
BORUT BLAJ ( Slovenia), speaking on behalf of the European Union and associated States, joined ACABQ in commending the Board of Auditors on the quality of its report. He noted with some concern that the Board had issued a modified audit opinion with two emphases of matter related respectively to unliquidated obligations and to expendable and non-expendable property. Both issues had been raised by the Board in previous reports and, in that regard, the Union could only but stress once again the importance of the implementation of the Board’s recommendations. He welcomed the information provided by the Board on previous recommendations, as well as the report of the Secretary-General on implementation. At the same time, he called on the Secretariat to implement outstanding recommendations, especially those of high priority and those that were “ageing”.
Last year, the Union had expressed its concern on the number of cancellations of prior-year unliquidated obligations, and it shared the concerns of the Board of Auditors and ACABQ that the situation might be indicative of an overstatement of expenditures in previous years, he continued. As for inadequate record-keeping of expendable and non-expendable property, that was not only of concern to the Union due to the related risk of financial loss to the Organization, but also in the context of the preparation for the implementation of IPSAS. There was no question that the implementation of IPSAS would be quite a challenge, and the need to plan ahead and start preparations should not be underestimated.
In addition to the above, the Union would pay close attention to a number of the many pertinent issues the Board had raised, he said. That included procurement and contract management, vehicle fleet management, air transportation, the integrated missions planning process and the high vacancy rate for resident auditors. With regard to the financial situation, the Union was concerned about the total outstanding assessments of $1.26 billion, including $697 million for active missions. The level had remained almost unchanged compared to 2005/06, and the persistent negative impact on cash flows was obvious. It was of the utmost importance that all Member States paid their contributions in full, on time and without conditions, in order for peacekeeping operations to fully carry our their mandates.
REN YISHENG (China), speaking on behalf of the “Group of 77” developing countries and China, noted the comment by the Board of Auditors that the financial statements presented fairly, in all material aspects, the financial position of United Nations peacekeeping as at 30 June 2007 and the results of its operations and cash flows, in accordance with the United Nations system accounting standards. The Board had not reviewed the restructuring of peacekeeping operations and UNAMID, but the realignment had been completed and UNAMID was in operation, and he looked forward to receiving reports on their reviews by the Board. The Group of 77 also noted with concern that outstanding assessed contributions had increased by 2.7 per cent to $697.3 million at the end of the current fiscal year. Peacekeeping operations could not succeed without adequate funding, and the Group emphasized that all Member States should pay their dues in full.
Regarding the two emphases made by the Board on the financial statements under review, he said the Group of 77 was concerned about the level of cancellation of unliquidated obligations totalling $202.28 million and shared the concerns of the Board and ACABQ that the high incidence of cancellation of prior periods’ obligations might be indicative of an overstatement of expenditures in previous years. He was also concerned with significant discrepancies in the system of asset management at various missions. He concurred with the recommendation of the Board of Auditors that the Secretariat needed to place greater emphasis on monitoring the creation of unliquidated obligations at the close of the financial year. He also shared the views of the Board on the management of expendable property. If deficiencies were not addressed in a timely manner, they would continue to have an adverse impact on the ability of missions to effectively manage their assets.
The ageing of the Board’s previous recommendations also remained a matter of concern, he said, emphasizing the importance of timely implementation of those recommendations. He also noted that the liabilities for after-service health insurance, together with end-of-service liabilities and post-retirement benefits were recognized in the financial statements for peacekeeping operations effective 30 June 2007. The Group of 77 noted the recommendation of ACABQ that the Board’s follow-up should include a review of how after-service health insurance liabilities would be presented in the context of IPSAS. He also noted with satisfaction that the Board continued to coordinate with OIOS and was convinced that coordination would ensure that they met the highest auditing and investigating standards.
The Group of 77 was concerned with many other issues, including procurement, contingent-owned equipment, quick-impact projects, air operations and ration management, he said. More efforts should be made to increase the opportunities for vendors from developing countries. Completion of guidelines relating to quick-impact projects needed to be expedited, and they should be implemented in all missions. Timely inspections of contingent-owned equipment should be completed to facilitate reimbursements to troop-contributing countries. As recommended by the Board, it was also necessary to develop comprehensive human resources and succession plans, to enable the missions to attract and retain suitably qualified persons.
Administrative and Budgetary Aspects of Peacekeeping Financing
The Committee then took up the Administrative and budgetary aspects of the financing of the United Nations peacekeeping operations.
WARREN SACH, United Nations Controller, introduced the relevant reports of the Secretary-General. He said that, at this point, all the budget proposals, performance reports and related special reports had been produced by the Secretariat and had been translated or were in the process of translation. The sum total of that production amounted to almost 3,700 pages, consisting of 44 separate documents, together with 33 sets of supplementary information. The production of those reports was the end product of a process of collaboration across departments that had begun in September last year and was completed on a phased basis, ending this month. Throughout the period, since ACABQ had begun its review in February, the Secretariat had managed to follow established practice and ensured a continuous flow of documents, so that, at all times, the Advisory Committee had some peacekeeping documents available for review. The Secretariat was, however, also aware that the Advisory Committee had other demands on its time to address other documentation.
He said that, while the early stages of preparation in the missions and the Department of Field Support had met planned schedules, the scrutiny required of those broad ranging and complex proposals had proven to be even more difficult and intricate than anticipated. In particular, the effort to produce documents of high quality that would be both coherent and sound from a budgetary and organizational point of view had proven to be particularly challenging. A number of subsidiary factors had also added to the time required to complete documents. In particular, the production of the 2008/09 budgets of UNAMID and MINURCAT in April had been a direct consequence of the adoption of the initial budgets of those two large new missions last December. That meant the work, which would have normally started three months earlier could not begin until January 2008 and, even then, preparation had had to be undertaken without the benefit of the expenditure experience of a prior financial period.
Political factors also intervened to delay the due issuance of budgets of the United Nations Interim Administration Mission in Kosovo (UNMIK) and the United Nations Mission in Ethiopia and Eritrea (UNMEE), he continued. The uncertain and challenging political situation on the ground meant that those budgets had had to be deferred in mid-process before issuance in April, as opposed to two months earlier. There had also been capacity issues within the Peacekeeping Financing Division, due to a combination of vacancies and extended sick leave of a key staff member.
Taking a longer-term perspective, he reiterated the point made earlier by the Chairman of ACABQ that the procedures put in place by resolution 49/233 were no longer working as intended. When the second resumed session had been instituted in May 1996 for the purpose of reviewing peacekeeping budgets, the level of resources sought for the period 1996/97 had been around $1.3 billion. The Fifth Committee was now trying to process five times as much budgetary resources within the identical time frame. It was, therefore, not a surprise that the system was under strain within the Secretariat, ACABQ and the Committee. The Committee might wish to consider revisiting the timetable and switching the May and June time slots between the Fifth Committee and the Committee for Programme and Coordination. Approval of peacekeeping budgets in June, as opposed to May, would adequately meet the needs of the financial cycle, while providing an additional month in which sufficient time would be available to produce properly analysed and well-constructed budget proposals.
Ms. MCLURG, Chairperson of ACABQ, introduced the related reports of that Committee, and said that, as she had commented on Monday, ACABQ had completed its general report without the benefit of having reviewed many proposed peacekeeping budgets, due to the late issuance of those documents. Nevertheless, it had made a number of relevant observations and recommendations on a wide range of peacekeeping issues. In addition to the specific mission budgets and the overview report, the Secretary-General had submitted a number of cross-cutting reports related to peacekeeping.
INGA-BRITT AHLENIUS, Under-Secretary-General for Internal Oversight Services, introduced the Annual Report of the Office of Internal Oversight Services (OIOS) Part II, and said that, during the period, the Office had issued 154 oversight reports related to peacekeeping operations. In aggregate, the findings fell predominantly into four risk areas: governance, compliance, financial and operational risk. While all four risk categories had potential impact for an adverse impact on the mandate, operations or reputation of the United Nations, the findings highlighted under compliance and financial risks stood out as particularly concerning.
She said compliance risk related to violations of, or failure or inability to comply with, laws, rules, regulations, prescribed practices, policies, procedures or ethical standards. Most examples provided in that section of the report related to sexual exploitation and abuse investigations, which had begun in 2006, but for which final reports had not been issued until 2007. There had been a significant decrease in the number of allegations reported to OIOS relating to sexual exploitation and abuse in 2007, as compared to 2006. All credible allegations would be investigated in a timely and thorough manner to reinforce the United Nations zero-tolerance policy.
Among non-sexual exploitation and abuse-related cases reported under compliance was a case in MONUC where OIOS had investigated allegations that national contingent members were engaged in exploitation of natural resources and trafficking of weapons and ammunition to rebel groups, she continued. That case had, in the last week, come under the media spotlight, with accusations that the OIOS had ignored, minimized or shelved allegations of serious misconduct pertaining to weapons trading in MONUC. Those accusations were completely unfounded. OIOS took seriously its role entrusted by the General Assembly to assist the Secretary-General in his oversight responsibilities. The media outlets had relied on, and distributed, old and well-known rumours. They had made no effort to provide any new evidence to OIOS, despite repeated requests by the Under-Secretary-General. Any new reports of possible wrongdoing that arose and/or additional information about prior reports of possible wrongdoing that were revealed would be subject to assessment and possible investigation.
She stated that financial risks related to a failure to obtain sufficient funding, inappropriate use of funds, inadequate management of financial resources, performance below expectations and inappropriate reporting and disclosure of financial performance. In MONUC alone, the Procurement Task Force had investigated over 40 allegations involving corruption and procurement irregularities. Similar types of financial breaches had also been identified by audits conducted by OIOS.
She added that, in response to General Assembly resolution A/RES/62/232 requesting the Secretary-General to entrust to OIOS the responsibility to undertake a comprehensive review of the use of extraordinary measures in UNAMID, the review was well under way and would be presented to the Assembly in the second resumed sixty-third session.
Mr. SACH, United Nations Controller, then introduced the note by the Secretary-General containing his comments on the Annual Report of OIOS.
Mr. BLAJ (Slovenia), on behalf of the European Union, expressed regret about the late issuance of some of the reports before the Committee and said it was not a good practice for the Committee to be considering reports in advance, in unedited form. It was also a pity that ACABQ’s cross-cutting report had had to be written before it had considered the individual mission budgets. Nevertheless, the reports raised some important issues that went to the heart of effective and efficient peacekeeping –- not least the question of the budget process itself, as well as issues such as skill gaps, effective resource management and better and closer working relations with mission partners. The Union remained strongly committed to peacekeeping and, therefore, welcomed the opportunity to take action to bring cross-cutting improvements to the way United Nations peacekeeping operations were managed and resourced.
FERNANDO DE OLIVEIRA SENA ( Brazil), speaking on behalf of the Group of 77 and China, stressed the importance of cross-cutting issues. While recognizing that each peacekeeping operation had its own mandate, faced its own challenges and functioned in a unique environment, he believed that cross-cutting resolutions could serve as an important policy tool, providing comprehensive guidance to the Department of Peacekeeping Operations on issues that were common to peacekeeping missions. Decisions on the resources and staffing of individual operations had to be taken in relevant individual budget resolutions. Full implementation of cross-cutting resolutions was critical to ensuring efficient and effective functioning of peacekeeping missions. The Group of 77 was concerned that certain provisions had not been adequately addressed in the Secretary-General’s overview report.
The Group reiterated its concern over the late submission of peacekeeping documents, he said. The Secretary-General was accountable to Member States for ensuring timely submission of quality reports. He also regretted that no information had been presented to the Assembly in response to requests in resolution 61/276 for reports on the use of consultants and developing an effective evaluation mechanism for the use of outside expertise, as well as death and disability claims.
Expressing concern over high vacancy rates in all missions, he emphasized the need for addressing the underlying issues. The Group of 77 took note of the steps taken by the Secretariat in that context, such as delegation of authority to missions for recruitment and temporary deployment of officers to accelerate recruitment in the missions facing high vacancy rates, but underlined the need for appropriate accountability measures in that process. He also stressed the need to pay due regard to equitable geographic distribution and gender balance, and reiterated the importance of hiring national staff as a means to overcome that continuous problem in all peacekeeping missions. He regretted that consensus had not been reached during the first resumed session on the need to improve conditions of service by harmonizing them and streamlining contractual arrangements. Those proposals would have had a significant impact on reversing high vacancy rates. The abolition of specific mission appointments would also contribute to the management of peacekeeping human resources.
Reiterating the Group’s longstanding position in support of the quick-impact projects, he said that every effort should be made to ensure their full implementation without artificial deadlines. Extension of the projects should be closely linked to the situation on the ground and the specifics of each and every mission. On results-based budgeting, the Group of 77 emphasized that it was imperative to ensure the adoption of coherent and consistent mandates and provision of related resources for their actual implementation. The benchmarking of specific, measurable and attainable objectives guaranteed effective implementation of the mandates and resources. The Secretary-General should initiate appropriate measures to ensure gradual implementation of results-based management, which would help ensure th
Published on: 2008-05-09
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