Press Releases

     

    GA/AB/3573

    8 October 2003

                                                                                                                                                 

    FIFTH COMMITTEE REVIEWS WORK OF UN OVERSIGHT BODIES,
    RECEIVING REPORTS FROM BOARD OF AUDITORS,
    JOINT INSPECTION UNIT

    Delegates Question Effectiveness of Follow-up Action on
    Reform Proposals for UNHCR, Joint Staff Pension Fund


     

    NEW YORK, 7 October (UN Headquarters) -- The Fifth Committee (Administrative and Budgetary) focused on the activities of two of the Organization’s external oversight bodies -- the Board of Auditors and the Joint Inspection Unit (JIU) -- and the means of increasing their effectiveness, as it took up a series of reports related to their work, including the results of several audits and inspections within the United Nations system this morning.

    One of the issues addressed in the debate was the implementation of the recommendations of the Board of Auditors.  Speakers noted an increase in the number of recommendations made by the Board during the past three bienniums -- a possible reason for the fact that only 117 of the 337 recommendations made by the Board for the biennium 2000-2001 had been implemented by June 2003.

    In that connection, the representative of Australia, also speaking on behalf of Canada and New Zealand, expressed concern that the United Nations Joint Staff Pension Fund had the lowest rate of implementation in 2000-2001.  According to the report, 33 per cent of the total recommendations had not been implemented.

    Many speakers, including representatives of the United States, Russian Federation and Japan, also stressed the need to address the issues “flagged” by the Board during its audit of the voluntary funds at the Office of the United Nations High Commissioner for Refugees (UNHCR) for 2002.  Without qualifying its opinion, the Board modified it to draw attention to its findings on the inadequacy of assurance obtained by the UNHCR that funds had been properly used for the purpose intended, and on the understatement of $70 million in the disclosure of non-expendable property.  Among its other findings was the fact that, while the official staffing table of the Office included 4,553 posts as of 1 July 2002, the actual staff roster was over 6,600. At the end of December 2002, 113 Professionals (9 per cent of the Professional staff) were “in-between-assignment”.

    As the Committee turned to the activities of the JIU, speakers emphasized its importance as the only system-wide independent external oversight body aimed at improving efficiency, management and coordination within the United Nations.  However, many delegates noted the need to streamline the Unit’s reporting, improve its working methods and produce targeted, action-oriented and timely reports.  The speakers welcomed a preliminary review by the Unit of its Statute and working methods, where it addressed some of the concerns expressed, focusing on such important aspects of the functioning of the Unit as selection of candidates; responsibilities of the Inspectors; and improving the ratio of Inspectors to the support staff.

    Also this morning, the Committee agreed on its revised programme of work, which had been adjusted by the Bureau to take into account the suggestions made by the delegates during the organizational meeting last week.  That decision was taken on the understanding that necessary adjustments would be made during the course of the session.

    Also participating in the discussion were representatives of Italy (on behalf of the European Union and associated States), South Africa, Syria, Canada, Switzerland, Pakistan, Sierra Leone, Egypt and India.

    Documents before the Committee were introduced by Alain Gillette, Director of External Audit and Chairman of the Audit Operations Committee; Alida Ferrena-Mahmud, Chief of the Oversight Support Unit of the Department of Management; Conrad S.M. Mselle, Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ); Armando Duque-Gonzalez, Chairman of the Joint Inspection Unit; Jaime Sevilla, representative of the Secretariat of the United Nations System Executives Board for Coordination; and Andrew Toh, Assistant Secretary-General for Central Support Services.

    The Committee will meet at 10 a.m. tomorrow, 8 October, to continue its consideration of the reports introduced today and to take up several requests for exemptions, which would allow countries in arrears under Article 19 of the Charter to vote in the Assembly.

     

    Background

    During its first substantive meeting this morning, the Fifth Committee (Administrative and Budgetary) was expected to address several issues on its agenda, including the reports of the Board of Auditors, review of efficiency, and profitability of commercial activities of the United Nations.

    Board of Auditors

    The first document before the Committee was a report of the Board of Auditors on the voluntary funds administered by the Office of the United Nations High Commissioner for Refugees (UNHCR) (document A/58/5/Add.5).

    Without qualifying its opinion on the 2002 statements, the Board draws attention to its findings on the inadequacy of assurance obtained by the UNHCR that funds had been properly used by its implementing partners (as of June 2003, the 2002 expenditure not yet supported by implementing partners’ financial reports amounted to $14.2 million); and on the $70 million understatement of non-expendable property.  The Board made recommendations to improve financial management and reporting, human resources management and programme management.  It has noted that, in most respects, the UNHCR has actively responded to recommendations, although some had yet to be implemented.

    The report notes that, in terms of financial management, 2002 was a difficult year, with a shortfall of $50 million in income.  Unallocated available reserves at the end of 2002 ($50 million) were insufficient to cover the end-of-service, and post-retirement benefits estimated at some $263 million.  Invalid expenditure reported in the financial statements amounted to some $5.9 million.

    Regarding human resources issues, the Board states that between 1998 and 2002 the number of staff employed has constantly exceeded the number of posts, with the difference reaching 952 in 2002.  In addition, as at 1 January 2002, there were 1,099 administrative “project staff” employed nominally by other organizations, but working, in fact, under direct UNHCR management.  As a result, while the official staffing table included 4,553 posts as of 1 July 2002, the actual staff roster was over 6,600. At the end of December 2002, 113 Professionals (9 per cent of the Professional staff) were “in-between-assignment”. As of 1 October 2002, three D-1 and one P-5 staff members had been without assignment for, respectively, 15, 30, 43 and 44 months, while being on special leave with full pay.

    Also before the Committee were three reports on the implementation of the Board of Auditors’ recommendations. The Board’s proposals on this follow-up were adopted by the Assembly in resolution 52/212, which emphasized managerial accountability for the implementation and addressed the need to disclose the position of individuals responsible and provide explanations if recommendations are not implemented.

    The Board’s report updated as of 25 June 2003 (document A/58/114), which relates to recommendations made in 2000-2001, covers 15 organizations on which the Board reports on a biennial basis and includes comments by the Board based on the Secretary-General’s reports on the implementation of recommendations by the United Nations (document A/58/97) and by its funds and programmes (document A/58/97/Add.1).  Also included in the document are the auditors’ comments on the implementation of recommendations by the United Nations Joint Staff Pension Fund and by the Office of Legal Affairs on a Board report on the handling of arbitration and claims cases.

    The Board reports that all the organizations have included timetables for the implementation of the recommendations and identified office holders responsible for that.  In general, the organizations have continued to operate effective mechanisms to strengthen oversight and monitoring in regard to the implementation of audit recommendations through special or existing committees.  The number of recommendations themselves has more than doubled over the past three bienniums, from 156 in 1996-1997 to 337 in 2000-2001, and this is a possible explanation why only 117 recommendations had been fully implemented by June 2003, while 195 were under implementation and 24 had not been implemented at all.  The remaining three recommendations were overtaken by events.

    Taking up the Board reports, the Advisory Committee for Administrative and Budgetary Questions (ACABQ) (document A/58/384) recommends approving the Board’s suggestion related to consolidation of three of its reports into a single document.

    In response to a request regarding reporting on the impact of audit recommendations, the Advisory Committee was informed that a concept paper had been prepared by the Audit Operations Committee, containing a definition of the responsibilities of the Board and those of the administrations of the various entities.  The Audit Operations Committee also planned to meet with representatives of the administrations with a view to finalizing the approach and the procedures, including a timeline for implementation. Welcoming this development, which would be consistent with the results-based concept, the ACABQ looks forward to receiving information on progress made in this regard.

    Joint Inspection Unit

    According to the report of the Joint Inspection Unit (JIU) for 2002 (document A/58/34), during the period under review, the Unit pursued the series of comprehensive reviews of the administration and management of its participating organizations that it had commenced in 1999.  In 2002, it completed 12 reports, one addressed to a single organization, the Food and Agriculture Organization (FAO), eight dealing with system-wide issues and three with several organizations.  The Unit intends to maintain a similar mix of reports in the future.

    The JIU continued to enhance its interactions with Member States and other oversight bodies of the United Nations system to achieve greater synergy and coordination.  Efforts were also under way to further develop a follow-up system that would allow systematic tracking of the status of implementation of the Unit’s recommendations. In 2002, the JIU reached agreements on the handling/follow-up of its reports with the secretariats of six additional organizations -- FAO, World Food Programme (WFP), World Meteorological Organization (WMO), United Nations Educational, Scientific and Cultural Organization (UNESCO), International Civil Aviation Organization (ICAO), and the World Intellectual Property Organization (WIPO).  Five of these agreements were subsequently endorsed by relevant legislative organs, and the sixth is scheduled to be submitted to the legislative organ concerned in 2003.

    Also before the Committee were two notes by the Secretary-General on the JIU (documents A/58/64 and A/58/291), transmitting the programme of work for the Unit for 2003 and the preliminary listing of reports for potential inclusion in the programme for 2004 and beyond.  Subjects to be addressed in the near future include harmonization of administrative practices and entitlements for United Nations field staff and reviews of human resources management, budgetary process and coherence for development.

    Another Secretary-General’s report discusses the implementation of the recommendations of the JIU (document A/58/220) contained in its reports on strengthening the United Nations capacity for conflict prevention (document A/50/853); sharing responsibilities in peacekeeping:  the United Nations and regional organizations (document A/50/571); and travel in the United Nations (document A/50/692).  The report shows that the Secretary-General and executive heads of organizations of the United Nations system continue to give priority to implementation of approved JIU recommendations and that there have been significant developments in all the cases under review.

    Also before the Committee was a note by the Secretary-General, which transmits the report of the JIU on the preliminary review of its statute and working methods (document A/58/343).  Regarding selection of candidates for appointment within the Unit, the document notes the need to establish scrutiny mechanisms to assess individual candidacies, because the current process is widely perceived as cumbersome.  The report also addresses the imbalance between the number of inspectors and research officers within the Unit, taking into account the principle of equitable geographical distribution and reasonable rotation.

    Also according to the report, the JIU intends to carefully examine the balance between evaluations, inspections and investigations in order to increase the cost-effectiveness of its activities.  The Unit also intends to improve its work programme through selection of relevant and timely subjects for its reports and invite more requests and suggestions from legislative organs and the United Nations System Chief Executives Board for Coordination.  Other goals include further improvement in the quality of the reports and the relevance of inspectors’ recommendations, and monitoring the implementation of approved/rejected recommendations.

    Review of Efficiency

    The Secretary-General’s report on outsourcing practices (document A/57/185) contains a list of activities that have been outsourced during a three-year period from 1999 to 2001 and provides notations regarding planned duration of activities.

    In a related report (document A/57/7/Add.1) the ACABQ requests that whenever an activity is outsourced for reasons of efficiency, the related savings should be indicated in the Secretary-General’s report.

    The objective of the Joint Inspection Unit’s report on management audit of outsourcing within the United Nations system (document A/58/92) was to determine if outsourced operations conducted in 1999 and 2000 were consistent with the policy directives contained in resolution 55/232 regarding the reasons, goals and criteria for outsourcing.  According to the document, new policy measures are not yet fully operational and many of the weaknesses identified by the Unit and the Office of Internal Oversight Services in their previous reports are still being rectified.

    The Inspectors conclude that the new policy guidelines, together with a more distinctive concept of outsourcing, should be incorporated in the relevant policy instruments of the organizations.  They also point out that United Nations procurement policies and procedures should be further reinforced with new standard contract clauses.  Priority attention should be given to improved monitoring and control over outsourced contracts to ensure delivery of the efficiency and cost benefits expected from them.

    The addendum to this report (document A/58/92/Add.1) contains the Secretary-General’s comments to the JIU’s recommendations. Expressing general support for the findings of the Inspectors, the Secretary-General calls attention to the need for flexibility, stating that decentralization would enable each organization to better determine what procedures should be applied, given its own unique circumstances.  Appropriate control, regulation and oversight mechanisms also should be tailor-made to each body.  They should not be overly strict, to avoid limiting the range of choice or negotiations leading to the most satisfactory arrangements.

    According to the document, measures to improve uniformity of contracts include a database of contract templates; reviews of contract changes by the Office of Legal Affairs; and development of a Web site on procurement best practices by the Inter-Agency Procurement Working Group.  The administration believes that all aspects of United Nations procurement, including outsourcing, are adequately covered by existing policies and procedures.  Also, as long as a supplier continues to offer the most efficient and cost-effective service and is selected through a fair, transparent and competitive process, the administration is unable to support the suggestion that the same supplier should not be used for more than 10 years.

    Another document before the Committee was a note by the Secretary-General (document A/58/258) transmitting the report of the Joint Inspection Unit on common and joint services of United Nations system organizations at Vienna.  The report reviews the framework under which such services are provided, highlights best practices, identifies areas for improvement and examines the scope for expansion.  It underlines the need for appropriate follow-through for each entity in terms of consultation with their respective governing bodies and exercise of leadership for such projects as common interpretation services and information and communication technologies.

    The document contains 12 recommendations, including the proposal to develop plans for the establishment of a single common administrative unit under the management of the United Nations Office at Vienna, to be implemented no later that the 2006-2007 budget cycle.  Also recommended in the report is a review of the existing cost-sharing mechanisms among the Vienna based organizations.

    An addendum to this report (document A/58/258/Add.1) contains comments of the Secretary-General and the United Nations System Chief Executives Board for Coordination on a wide range of issues raised by the Unit.  Having considered this report, the Consultative Committee on Common Services, in particular, states that it does not consider establishment of a single administrative unit desirable.  However, the Committee and the Vienna Office will continue to review all common services to improve their efficiency.  The recommendation to conduct a review of cost-sharing mechanisms is found acceptable, and a review of the cost of running parallel language training services will be undertaken soon.

    Having considered several JIU reports, including those on outsourcing and revenue producing activities, the ACABQ, in a related report (document A/58/389) recommends that the Assembly consider those documents in the light of its comments.  The matters dealt with in the report of Unit on common and joint services in Vienna are of continuing concern to the Advisory Committee, and it intends to revert to the report in the context of its future consideration of the issue.

    The ACABQ also concurs with the Secretary-General’s comments on the outsourcing report, in which he expresses general support for the findings of the Unit, but emphasizes the need for flexibility and due consideration of the unique environments in which individual organizations operate.  It also agrees that “the recommendations may be seen more as guidelines than as prescriptions for action” and that, as long as a supplier continues to offer the most efficient and cost-effective service and is selected through a fair, transparent and competitive process, it is in the interest of the Organization to continue to use him.

    Profitability of Commercial Activities

    In his report on measures to improve the profitability of the Organization’s commercial activities (document A/57/398), the Secretary-General expresses his intention to present such proposals in connection with the consideration of the programme budget this autumn.  It would be the Secretary-General’s intention to propose the creation, under the jurisdiction of the Department of Public Information (DPI), of a unit to further public outreach through revenue-producing activities and reactivate the senior Advisory Board on Services to the Public.  In a related report (document A/57/7/Add.1), the Advisory Committee notes this intention.

    The Joint Inspection Unit report on the United Nations system revenue-producing activities (document A/57/707) points out that most so-called revenue-producing, or “commercial activities” are integral to the work programmes of the United Nations, but also present an opportunity to generate revenue.  The activities reviewed in the document range from those that generate small amounts of income -- for example, the sale of souvenir items -- to those considered major revenue producers, such as fee-for-service operations at the World Intellectual Property Organization (WIPO) or the sale of greeting cards at the United Nations Children’s Fund (UNICEF).

    The report recommends consideration of new management arrangements for revenue-producing activities in order to improve efficiency, proposing corresponding changes in the financial and administrative regulations and rules of various organizations involved.  The document notes the need to manage existing revenue-producing activities in a more efficient and businesslike fashion, including through improved marketing strategies and techniques and expanded geographical coverage of sales networks, as may be appropriate to the nature and mandate of the organizations concerned.

    In their comments to the JIU report (document A/57/707/Add.1), members of the United Nations System Chief Executives Board for Coordination note its timeliness in light of efforts to tap possible new sources of income in support of the organizations’ mandates.  In some cases, greater specificity on the means of implementation is essential before the recommendations can be considered, however.  Some of the recommended measures have already been addressed in the Secretary-General’s recent reports.

    Some Board members observe that the report focuses more on the publications and related products than on the development of new income-generating activities.  The use of the level of sales of publications as an indicator of efficiency, as well as the establishment of revenue targets, would be relevant only in those cases where publications are targeted at high-income recipients.  Clearly, this is not the situation for many of the organizations of the system, for which dissemination of information and cultivation of a positive image of the United Nations are clearly the priorities.

    In a related report (document A/58/7), the ACABQ takes note of the report of the Joint Inspection Unit, as well as the comments of the Secretary-General thereon.  With regard to the recommendation in which the Unit requests the Secretary-General to consider merging revenue-producing activities into a single Business Division managed by an interdepartmental body, it is noted that the Secretary-General will explore this recommendation in a report to be submitted to the Assembly at its fifty-eighth session.

    Organization of Work

    At the opening of the meeting, the Committee took up its revised proposed programme of work, which had been adjusted by the Bureau to take into account the suggestions made by the delegates during the organizational meeting last week.  Participating in this discussion were the representatives of Italy (on behalf of the European Union), Syria and Egypt, who expressed their preferences for allocation of meetings for particular agenda items and commented on the issuance of documentation before the Committee. 

    The programme of work was then adopted, on the understanding that necessary adjustments would be made during the course of the session, as needed.

    Introduction of Documents

    ALAIN GILLETTE, Director of External Audit (France) and Chairman of the Audit Operations Committee, introduced the Board of Auditors’ reports, saying that, while unqualified, the audit opinion of the Board had been “modified” to draw attention to two findings.  As for a $70 million understatement of non-expendable property, the Office of the United Nations High Commissioner for Refugees (UNHCR) expected to solve the problem in a few months, with new software.  The Board had mentioned, secondly, the lack of adequate assurance that all funds provided to implementing partners had been used for intended purposes:  as at June 2003, the use of $14.2 million remained unjustified.  The amount yet to be justified had been reduced to $6.8 million in July 2003.  On both counts, the UNHCR had been actively working on improvements.

    However, once again, the UNHCR has ended the year with a significant shortfall of $50 million, over $900 million in expenditures, he continued.  Non-earmarked available reserves were down at $50 million.  The increase in expenditures, mostly general and supplementary programme funds, was not matched by appropriate resources.  That would become worrisome, if the UNHCR did not reverse the trend.

    Listing other main findings of the Board, including those on human resources management, he said that the number of staff funded under temporary assistance budgets showed a sharp increase.  Also, 225 of them, out of 1,264, were under indefinite appointment.  The “indefinite” category was, of course, not in line with the “temporary” character of the corresponding resources.  As a consequence of a contract policy implemented three years ago, three fourths of the staff members were now under de facto permanent appointments, versus one sixth five years ago.  That policy was in contrast to changing operational needs, until the High Commissioner had recently reversed it.

    In conclusion, he said that the reaction to the auditors’ findings had been immediate:  the High Commissioner and his team had undertaken measures to implement their recommendations.

    Turning to the report on the implementation of the Board’s recommendations, he said that, in general, the organizations had mechanisms to strengthen oversight in that regard.  However, the Board would continue to follow up on the effectiveness of these mechanisms, which should be reflected in the rate of implementation.

    Regarding the recommendation to consolidate three of the Board reports into a single document, he said that two years from now, during the sixtieth session, the Board would present the text of that recommendation, then the full comments by the Administration, provided those would be kept within reasonable length, and finally the comments by the Board. 

    Introducing the Secretary-General’s reports on the implementation of the recommendations of the Board of Auditors, ALIDA FERRENA-MAHMOUD, Chief of the Oversight Support Unit, Department of Management, stressed that the Administration attached great priority to the timely and comprehensive implementation of the Board’s recommendations and ensured meticulous compliance with reporting requirements in that regard.  The Administration concurred with the ACABQ that such reporting served as an essential tool for ensuring compliance. 

    Should the Assembly concur with the recommendation of the Board to consolidate the reports of the Secretary-General on the accounts of the United Nations and on the funds and programmes in a single document, she continued, such a decision would eliminate the present duplication and improve efficiency of reporting on implementation of the recommendations in the future.

    The documents before the Committee provided responses to the concerns expressed by the Board of Auditors on the accounts of the United Nations on issues relating, inter alia, to the trust funds, the enhancement of the Integrated Monitoring and Documentation Information System and inter-agency services.  In most cases, the Administration concurred with the recommendations of the Board, and implementation had proceeded or continued to proceed, as appropriate.  In the lesser instances where the Administration was unable to begin implementation, the recommendations had been duly noted.

    The responsibility for ensuring the timely implementation of the Board’s recommendations rested with respective executive heads, who would be represented during the course of the Committee’s deliberations.  However, the Secretariat had always provided assistance on specific issues, if and when necessary, and it would continue to follow up on the progress of implementation within the framework of monitoring the delegated authority to funds and programmes.

    The Chairman of the Advisory Committee on Administrative and Budgetary Questions, CONRAD S.M. MSELLE, introduced a related report of that body (document A/58/384), saying that the Advisory Committee welcomed the observations of the Board on the human resources management, as well as the comments of the UNHCR on the implementation of the recommendations of the Board.  In paragraph 17 of its report, the ACABQ recommended that the Assembly approve streamlined reporting by the Board.

    Statements

    Speaking on behalf of the European Union and associated States, ROBERTO MARTINI (Italy) commended the report of the Board of Auditors on the audited financial statements of the voluntary funds administered by the UNHCR for the year 2002 and the report of the ACABQ.  He said the Union shared the concerns of the Board, which had drawn attention to a number of serious shortcomings in the management of financial resources, staff and programmes.  It was essential that the UNHCR addressed those shortcomings swiftly and thoroughly and that all the recommendations were soon implemented.  He noted that that was the intention, and that the UNHCR had provided a very preliminary response.  However, he wanted to request an early report on the implementation at the resumed session of the Committee in March.

    In particular, the European Union had noted a number of critical deficiencies in staff management in the auditors’ report and, sharing the comments of the ACABQ, expected the planned reforms to be introduced for a more transparent and stronger control of the staffing table.  Moreover, the grant system used to finance administrative costs could provide a needed flexibility to the UNHCR, but there must be transparency in the process, and he would appreciate further details on that matter, on the staffing requirements for the next biennium and the rationale for the grant system.  The Union also stressed the auditors’ recommendations addressed to the UNHCR to comply with the accounting standards of the United Nations system and, thus, to reform its accounting policy and financial system in order to achieve accurate accounting of expenditures.

    Turning to the second report of the Board of Auditors, he said that the European Union was pleased that all of the 16 bodies listed in the auditors’ report had taken action to implement the recommendations.  However, it was his impression that the note of the Secretary-General on the implementation of recommendations approved by the Assembly still did not contain a clear statement of progress in that process.

    DAVID DUTTON (Australia), speaking on behalf of Canada, Australia and New Zealand, said it was indicated in document A/58/114 that the United Nations Joint Staff Pension Fund had the lowest rate of implementation for recommendations made by the Board in 2000-20001.  According to the report, 33 per cent of the total recommendations had not been implemented.  His delegation would appreciate an update by the Board on the implementation of its recommendations by the Pension Fund.

    He said he was also concerned that numerous United Nations entities -– including the Office of the United Nations High Commissioner for Refugees (UNHCR) and the United Nations Development Programme (UNDP) -- had large unfunded liabilities for end-of-service benefits.  He believed that this situation needed to be corrected, and that prudent management required full funding of these liabilities.  This was especially important in organizations that relied heavily on voluntary funding.

    Canada, Australia and New Zealand were deeply concerned at the findings contained in the Board’s report on the UNHCR, he said, and then agreed with the Advisory Committee on Administrative and Budgetary Questions (ACABQ) that the UNHCR needed to take urgent action to address the problems identified in the report.  The UNHCR must act to ensure that it operated within the approved staffing table, that staff were fully utilized and that administrative costs were reduced as a proportion of total spending.  The UNHCR should also manage its spending within realistic estimates of expected income, so as to avoid further depletion of reserves.

    KAREN LOCK (South Africa) noted the increase in the number of recommendations made by the Board during the past three bienniums and observed that only 117 of the 337 recommendations made by the Board for the biennium 2000-2001 had been implemented by June 2003. The primary managerial responsibility for the implementation of the Board’s recommendations lay with department heads and programme managers, she said.  She, therefore, urged the Secretariat and audited organizations to actively pursue their timely implementation.

    She said her delegation took note of the various recommendations made by the Board aimed at improving the financial management and reporting, human resources management and programme management of the UNHCR.  While she remained cognizant of the fact that the High Commissioner at times operated in a difficult environment, she wished to stress the importance of ensuring compliance with the United Nations Staff Rules and Regulations and system-accounting standards.

    Finally, she drew the attention of the Committee to the General Assembly’s request to the Secretary-General and executive heads of the funds and programmes of the United Nations to examine governance structures, principles and accountability throughout the United Nations system (resolution 57/278).  Bearing in mind the contribution that this may make towards proper financial management, her delegation would like an indication of the status of the governance review.

    CHRISTOPHER WITTMANN (United States) said his Government strongly believed in the role that oversight played in ensuring that United Nations activities were carried out efficiently and effectively.  His delegation, however, was concerned about the findings of serious shortfalls in management at the UNHCR.  He was concerned, for example, that the ACABQ reported that the Board of Auditors “modified” its audit opinion, citing such practices as missing audit certificates and financial reports for many implementing partners’ projects for 2001 and 2002.

    In areas such as accounting for non-expendable property and justification of expenditures in implementing partner financial reports, he called on the UNHCR to take additional action and to report more frequently to UNHCR’s Standing Committee on progress made towards resolution of those issues.  His delegation was encouraged, however, by UNHCR’s recent efforts to modernize its financial and supply tracking capabilities.

     

    He said his delegation recognized that the number of recommendations of the Board had more than doubled over the past three bienniums.  An implementation rate of only 35 per cent was disappointing, but taken together with the 58 per cent of recommendations still being implemented, he was encouraged that the recommendations were being taken seriously and requested that more effort be made in ensuring full implementation as soon as possible. 

    VLADIMIR A. IOSIFOV (Russian Federation) noted the significant scope of work accomplished by the Auditors in recent years.  Regarding the implementation of the Board’s recommendations, he said that despite the progress achieved, the proportion of the recommendations fully implemented by June 2003 was still rather low, and some had not been implemented at all.  He called on the organizations involved to ensure full implementation of the Board’s recommendations.  As for the Board’s reports on the UNHCR voluntary funds for 2002, he agreed with the Board that the introduction of a special allowance for its staff working in hazardous duty stations was in excess of the authority of the High Commissioner and agreed with the need to analyse the legal basis for such allowances.  His delegation was looking forward to the Board’s report on the Capital Master Plan.

    SHINICHI YAMANAKA (Japan) said his delegation wanted to focus on the UNHCR audit.  He attached importance to proper human resources management and noted that the number of UNHCR staff members in 2002 was 5,500 and the number of posts was 4,553.  The difference between them was 952 and was apparently too high.  He endorsed the recommendation of the Board in paragraph 75 of its report regarding tightening the UNHCR’s control over the number of staff funded from temporary assistance and noted some explanations contained in paragraphs 71 and 72 of the report.  It was necessary to continue efforts to improve the situation.  As for paragraph 69 of the report on the posts funded directly from the regular budget and under grants from it, he wanted to once again point out that the presentation of requirements in the regular budget under grants and contributions was not accountable to Member States.  He agreed with the observations of the Board.  In the course of discussions during a recent session of the Committee for Programme and Coordination (CPC), the Secretariat had disclosed its intention to provide detailed information in that regard, and he wondered when the Member States would receive it.

    Mr. GILLETTE, responding to questions from delegates about the implementation of pension fund recommendations, said that some of the recommendations depended on a review of accounting procedures, which would be undertaken in the near future.  Regarding the scope of unfunded liabilities, he said that that issue would be addressed in a forthcoming report.

    With regard to a question about governance and accountability, he said that the time was opportune to consider closer compliance with governance practice and principles.  The Board would monitor such developments and would further comment at the appropriate time.

    NAJIB ELJY (Syria) said that in document A/58/5/Add.5 the countries were classified in schedules according to geography.  Syria had, therefore, been mentioned in the Middle East region.  States should not be classified geographically but in alphabetical order, he said, and asked for a corrigendum of the document.

    MARY ANN WYRSCH, Deputy High Commissioner of the UNHCR, said that the issues that had been discussed in the Board of Auditors and the ACABQ report had been thoroughly examined in the UNHCR Executive Committee and many proposals had been discussed.  Those proposals could be found in addendum 1 of the Board of Auditors report.  A number of delegations had spoken about the need for transparency, and responded that in the recent UNHCR budget document there was a full exposition of the UNHCR workforce.  The UNHCR was also taking many steps to deal with the staff “in between assignment” issue, she said.  She pointed out, however, that over 90 per cent of the staff in between assignments were engaged in missions or temporary assignments.

    She said she noted the comment about the classification of countries under geographic headings, and it would be addressed.

    Introduction of JIU Reports

    The Chairman of the Joint Inspection Unit, ARMANDO DUQUE-GONZALEZ, introduced the Unit’s annual report, its programme of work and preliminary listing of future reports, as well as a document on the preliminary review of the statute and working methods of the JIU.  He said he believed this session of the Assembly would not be a routine, ordinary one for the JIU, because 2002 had been a particularly busy and productive time for the Unit, which had also undergone a dramatic change in its composition following the departure of five inspectors at the end of 2002.

    He said that during 2002 the Unit had issued 12 reports and three notes, and three reports had been issued since as 2003 documents.  Several more would be finalized before the end of the year.  The reports on which the Unit was now working reflected its continued determination to fully play its role as a catalyst for the comparison and dissemination of best managerial, administrative and programming practices throughout the organizations of the United Nations system.

    It was necessary to streamline and simplify the process of reporting on implementation and to consolidate all reporting within the Unit’s follow-up mechanism, he said.  It was his strong belief and hope that the document on the review of the Unit’s statute and working methods would generate significant discussions and would lead to far-reaching changes.  The report stemmed from the conclusion reached by the Unit that if it were to fulfil its mandate and meet the needs of the participating organizations more efficiently, further improvements must be enacted in the near future.  At this point, the Unit was not seeking any decisions by the Assembly, but rather the guidance from an open and frank discussion of the issues thus far identified, including the composition and appointment of the Unit, its functions and powers, its mode of operation and administrative and financial arrangements.

    JAIME SEVILLA, representative of the Secretariat of the United Nations System Chief Executives Board for Coordination, introduced the report of the Secretary-General on the implementation of the recommendations of the JIU.  Listing the contents of the document, he agreed with the need to eliminate overlapping reports, to enable a more streamlined approach to the implementation of the recommendations and to ensure a more timely and comprehensive presentation of information to Member States.  Priority attention was given to the recommendations of the JIU and their implementation.

    Mr. MARTINI (Italy), on behalf of the European Union and associated countries, said that in recent years the General assembly had repeatedly raised some critical points concerning the work of the Joint Inspection Unit (JIU), including the content of their reports, their late appearance, and the need to improve coordination between the JIU and other oversight bodies.  Those were not only concerns of the Fifth Committee, however.  During the forty-third session of the Committee on Programme and Coordination (CPC), some delegations had expressed their concern about the JIU’s performance and had recommended that the Unit undertake an in-depth review of its Statute.

    In response to this request, the JIU had presented a report on the preliminary review of its Statute and working methods where it addressed some of the concern expressed by Member States.  The European Union welcomed that action and requested the JIU to present the final review during this session.

    Mr. WITTMANN (United States) said the annual report of the JIU (document A/58/291) contained little useful information, and provided little sense of how effective the Unit was in achieving its main objectives.  He was disappointed that an effective JIU follow-up mechanism had not been developed, but was hopeful that proposals to revitalize the Unit might lead to some improvement.

    On the JIU programme of work, he said it should have a narrower focus and that the emphasis should be on efficiency and effectiveness.  He questioned the value of a report on the Collective Experience of Coherence for Development, and felt there was some repetition in the programme of work.

    Turning to the document on the implementation of JIU recommendations, (document A/58/220), he said it duplicated other efforts to document the implementation of JIU recommendations.  At a cost of more than $1,000 per page, he said, that represented more than $20,000 in duplicative expenditures; that money should be applied to higher priority activities.

    The present guidance for choosing inspectors was not good enough, he said.  Many inspectors had had only diplomatic experience and lacked sufficient knowledge to carry out the required duties.  Potential nominees should have audit experience, he said, and the Unit needed to establish a checklist and an internal screening process to ensure that.

    Mr. IOSIFOV (Russian Federation) said his delegation attached great significance to the activities of the JIU and the efforts to strengthen that body.  As for the collective work of the Unit to review its Statute and methods of work, he was pleased that the Unit itself had come up with innovative ideas and initiatives.  The report was interesting, and he was prepared to take a detailed look at it.  However, he was certain that relevant provisions of the Statute should continue to be carried out. It was also necessary to make optimal use of the limited resources.  The amendments in the Statute should not be a goal in themselves, but might become necessary.  The reform should be preceded by clear analysis and calculations.  For now, the Unit should proceed with its work, as usual.  It should not be paralysed by the discussion of the reform.

    JERRY KRAMER (Canada), speaking for Canada, Australia and New Zealand, expressed his concern about the effectiveness and impact of the JIU’s contribution.  Far too often, he said, reports had not been timely, had addressed very broad themes, and had made recommendations that did not enable concrete action.  While the theory of an independent, external oversight body applying a system-wide lens to efficiency was appealing, the actual experience raised real doubts about the practical value for the participating organizations and Member States.

    Whereas individual inspectors were dedicated and could often produce good work, he said, he had serious doubts about the fundamental model.  Did it really make sense these days to structure oversight of complex organizations around 11 people, working as individuals, without specifically mandated qualifications and very little technical support, choosing subjects more or less at will, without internal mechanisms to ensure quality and relevance?  This model was not conducive to effective oversight.  It was also very costly.

    The intention of the delegations of Canada, Australia and New Zealand at this session was, therefore, to work closely with others to make changes that would at least improve report quality, strengthen the link between the work of the JIU and the managerial and administrative challenges of the participating organizations, and improve the cost-effectiveness of the JIU for Member States.

    ANJA ZOBRIST RENTENAAR (Switzerland) said she recognized the need for a system-wide, independent external oversight body aimed at improving efficiency and at achieving greater coordination between organizations of the United Nations system.  However, the reports and recommendations of the JIU were often too broad and theoretical and lacked proposals for concrete action.  Furthermore, the topics chosen often failed to represent important core issues of the United Nations common system.  Due to the lengthy consultation process involved, JIU findings were frequently outdated when they reached the General Assembly.

    In view of the considerable sum of money -- more than $8 million per biennium -- hat was spent on the JIU, her delegation had the intention to take up the reform of the Unit not only under this agenda item, but also in the context of the programme budget 2004-2005.

    Mr. YAMANAKA (Japan) said his delegation attached great importance to the efforts of the JIU to improve efficiency, management and coordination within the United Nations.  Welcoming the issue of the reform of the Unit, he said its work should aim at enhancing ability to produce high-quality, action-oriented and timely reports.  It was necessary to deliberate on the need to change the Statute carefully, from a medium- to long-term perspective, with due consideration to the original intention of the establishment of the Statute, while improving the working methods of the Unit.

    Among the issues which he said needed clarification, he noted the ratio of inspectors to research staff and the paragraph regarding the functions, powers and responsibilities.  Action taken on the recommendations largely depended on the quality of the report, rather than action by participating organizations.  In that context, he pointed out that reports should be required to be more streamlined and targeted, than broad and political.  The Unit should continue its efforts to ensure the quality, relevance and impact of its reports.  As for the administrative, budgetary and financial arrangements, he noted with interest that the Unit was considering ways to strengthen the authority of the Chairman, thus, allowing him or her to genuinely lead and manage the work of the Unit.  He was looking forward to a concrete proposal of the Unit, to be introduced as soon as possible.

    AIZAZ CHAUDHRY (Pakistan) agreed with the representative of the United States that the report on the preliminary review of the Statute and working methods of the JIU was the most important report before the Committee today.  He was glad that the Unit had responded to the call for a substantial review.  While the JIU had already done some internal work to revise its guidelines and work methods, that exercise needed to be more real and credible.  He was glad the Unit had come to a conclusion that reform was needed, and the elements identified in the report seemed relevant. 

    Continuing, he said the recommendation on the need to examine the qualifications of the candidates was extremely important.  He was not too sure that they needed the audit background, because it was important to avoid duplicating the work of the Board of Auditors.  The qualifications should include the need to have broad knowledge of the United Nations system, however.  Similarly, improving the ratio of Inspectors to the support staff was required.  As for the functions, powers and responsibilities, it was necessary to focus on the areas of comparative advantage related to other oversight bodies. 

    Turning to the JIU’s programme of work for 2003, he said that the themes had already been identified, and work was under way.  Underscoring the importance of the review of the United Nations budgetary process and the coherence of development at the country level, he also emphasized the need to follow the criteria in the selection of topics.  He said that subject was as important as the functioning of the Unit itself.

    Regarding the preliminary listing of future reports of the Unit, he noted that the decision on that matter had been postponed until the review had been completed.  From the topics retained from 2003, he noted that the report on the United Nations Conference on Trade and Development (UNCTAD) institutional and programmatic issues was not really relevant.  It would be more useful to focus instead on other aspects of the work of UNCTAD.  Finally, he pointed out that the JIU was the only system-wide oversight body, and it was important to take a positive and proactive approach to that body.  While its work could be improved, he was convinced of its relevance. 

    JAMES JONAH (Sierra Leone) expressed his surprise at the critical comments about the JIU.  Veterans of this Committee would recall some of the wonderful input from the JIU over the years, he said.  Responding to the representative of the United States, he said he was taken aback by his comments regarding qualifications of inspectors, and endorsed the comments of the delegate of Pakistan on this matter.  Members of the JIU may not have audit backgrounds, but they had extensive experience within the United Nations, in particular, with the Fifth Committee.  It would be dangerous to bring in experts who had little inkling about the nature of the United Nations, he concluded.

    YASSER ELNAGGAR (Egypt), commenting on JIU report A/58/343, said his delegation was among those that called for the strengthening of monitoring organs.  As far as the qualifications for inspectors were concerned, his delegation felt it was important for inspectors to have significant system-wide experience within the Organization.

    JAIDEEP MAZUMDAR (India) said that his delegation attached enormous importance to the JIU as the only system-wide oversight body, yet his delegation had called for its reform during the last CPC session and continued to do so.  

    Such reform would only improve the utility of the Unit.  Its work in that respect had been a good beginning, and it was important to focus on such issues as the qualification of the inspectors, and the ratio of inspectors to support staff.  There was also a need to rejuvenate the JIU, and he looked forward to the discussion on that issue.

    Introduction of Further Reports

    ANDREW TOH, Assistant Secretary-General for Central Support Services, introduced the report on outsourcing practices, which provides a list of outsourced activities from 1999 to 2001.  According to the report, various offices had determined that all outsourced activities be made in accordance with the established criteria and guidelines contained in resolution 55/232, or were in the process of conversion to achieve adherence. The latter related to security services that had been previously outsourced in the Economic Commissions in Santiago and Bangkok.  The Economic Commission for Latin America and the Caribbean (ECLAC) in Santiago had received a budgetary allocation for nine security posts.  Out of the 30 security positions in the Economic and Social Commission for Asia and the Pacific (ESCAP), Bangkok, 25 were now encumbered by United Nations recruits.  Full manning by United Nations staff would be completed by the end of the year.  The Economic and Social Commission for Western Asia (ESCWA) in Beirut, where security had been previously outsourced, had completed the recruitment and training of 21 security officers.

    Introducing a JIU report on management audit of outsourcing, Mr. DUQUE-GONZALEZ said the general conclusion of the review was that the organizations concerned were still in the process of adapting their operations to the new outsourcing guidelines.  The report contained nine recommendations that should enable the bodies concerned to rectify the weaknesses identified by the Unit.

    Mr. MSELLE introduced related reports of the ACABQ, saying that during the preceding session, the Advisory Committee had addressed the issue of outsourcing in document A/57/435.  In particular, he drew attention to the observation that in the future, whenever an activity was outsourced for reasons of cost efficiency, the related savings should be indicated.  In document A/58/389, the Advisory Committee offered observations on the latest report of the JIU. 

    Mr. DUQUE-GONZALEZ, introducing the JIU report on common and joint services of the United Nations System Organization at Vienna (document A/58/92), said that the report was part of a series of reports examining administrative arrangements at a number of duty stations.  A single common services administrative entity under the management of the Vienna Office would remove many of the weaknesses in the current system of administration, he said, and it might also be more dynamic in furthering the development of common services in areas such as procurement, information and communication technology, and human resources management.

    Mr. SEVILLA, introduced the note of the Secretary-General transmitting his comments and those of the United Nations System Chief Executives Board for Coordination on the report of the JIU on common and joint services at United Nations, Vienna, contained in document A/58/258/add.1.

    Mr. MSELLE introduced the related report of the ACABQ contained in document A/58/389.

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