14 October 2005
Budget Committee Takes up 2004-2005 Report of Internal Oversight Office; Stengthened Accountability, Plan for Reduced Duplication Also Discussed
(Issued on 13 October 2005.)
NEW YORK, 14 October (UN Headquarters) -- The Fifth Committee (Administrative and Budgetary) today took up the operations of the Office of Internal Oversight Services (OIOS) for 2004-2005, and its 60-page report that highlighted 2,167 recommendations and identified $35.1 million in recommended savings, of which $18 million had actually been saved and recovered.
The OIOS has the unique mandate of combining monitoring, inspection, evaluation, internal audit, investigation and management consulting. The thousands of recommendations targeted accountability mechanisms, internal controls and efficiency at the United Nations, and 779 of those -- which included calls for increased productivity, savings and accountability for fraud -- were classified as critical to the Organization. In her first address to the Committee, the new Under-Secretary-General for Internal Oversight Services, Inga-Britt Ahlenius, said about 50 per cent of all OIOS recommendations had already been implemented.
The representative of the Republic of Korea expressed hope the Office's knowledge -- gained through a wide range of functions from auditing to investigations -- would be shared throughout the Organization. He also emphasised the need for a strong chain of command to help the Office react efficiently and promptly to developments around the globe.
The representative of Japan supported the Office's work and its efforts to enhance transparency. She noted that about half of the 2004 recommendations were implemented with substantial savings and called for concrete action to implement all outstanding recommendations.
Also today, the Committee considered a series of reports under its review of efficiency agenda item. The representative of the United Kingdom, speaking on behalf of the European Union, was concerned with the situation in the subregional offices of the Economic Commission for Africa (ECA) and said she found the OIOS report on the matter "a catalogue of deficiencies and failings". The subregional offices accounted for 25 per cent of the regular budget funding of the ECA and were to play a key part in delivering ECA objectives around the continent. There appeared to be a lack of strategic direction from ECA headquarters on how the subregional offices should be integrated into programme delivery. Among other areas of concern was the lack of specialist skills and operational experience among the offices' staff.
In connection with the Secretary-General's report on measures to strengthen accountability at the United Nations, the representative of New Zealand, also speaking on behalf of Australia and Canada, said last month's Summit had stressed the importance of accountability, oversight, transparency and ethics. He welcomed such recent measures as the more clearly-defined role of the new Management Performance Board and its focus on the performance of individual senior managers. Agreeing that clearly defined responsibilities and performance expectations at all levels were needed, he added that they should be coupled with mechanisms to ensure that there were consequences associated with poor performance.
He also welcomed the agreement to strengthen the OIOS as a first step to improve oversight. He said effective and independent, external evaluation of United Nations oversight, as agreed during the Summit, was needed.
The representative of Japan was among the speakers who expressed disappointment with the Secretary-General's report on the contribution of the Department of Management towards improvement of management practices and the efforts to develop a time-bound plan for the reduction of duplication, complexity and bureaucracy in the United Nations. The Advisory Committee had found the report to be "conspicuously lacking" in assessing the impact of the Department of Management's measures and characterized the second section of the report as a "snapshot" of the situation, not a time-bound plan. For that reason, Japan requested a comprehensive follow-up report on the matter.
Representatives of the United States, Libya and Iraq also made statements, as the Committee concluded its consideration of the Board of Auditors' reports. Reports were introduced by Nancy Soyka-Hurtz, Principal Officer in the Office of the Under-Secretary-General, Department of Management; and E. Besley Maycock of the Advisory Committee on Administrative and Budgetary Questions (ACABQ).
The Committee will continue its work at 10 a.m. Thursday, 13 October, when it is scheduled to hear a statement on the financial situation of the Organization by Under-Secretary-General for Management and continue its consideration of the reports of the OIOS and review of efficiency.
The Fifth Committee (Administrative and Budgetary) met this morning to continue its debate on the reports of the Board of Auditors, consider several reports of the Office of Internal Oversight Services (OIOS) and begin its review of measures to strengthen accountability at the United Nations, as well as the contribution by the Department of Management to improvement of management practices and reduction of duplication.
Annual Report of OIOS
The first document before the Committee was an annual report of the Office of Internal Oversight Services (OIOS) for the period ending 30 June this year (document A/60/346). During the period under review, the OIOS identified a total of $35.1 million in recommended savings, of which $18 million was actually saved and recovered. Approximately $3 million was identified as loss or waste of resources. The Office issued 2,167 recommendations, of which 779 -- calling for, among others, improvements in productivity, savings, and accountability for fraud, waste and abuse -- were classified as critical to the Organization. About 50 per cent of all OIOS recommendations have already been implemented.
Assignments undertaken by the Office include investigations of sexual exploitation and abuse in several peacekeeping missions; oversight of the billion-dollar claims process of the United Nations Compensation Commission; procurement investigations; and tsunami relief assessment, which identified ways to streamline multi-agency relief efforts. The Office also initiated a working group, which drafted the Organization's first whistleblower protection policy, proposing the establishment of an ethics office at the United Nations.
In her preface to the document, the new Under-Secretary-General for Internal Oversight Services, Inga-Britt Ahlenius, recalls that the Secretary-General has proposed a comprehensive review of OIOS operations to further improve accountability and oversight. The review's aim would be to strengthen the independence and authority of the Office and ensure it is fully equipped with resources and expertise. She supports the Secretary-General's proposal to assess the functions and reporting procedures of the Office, adding that such a review must be objective, independent and comprehensive. It should examine the effectiveness of internal control at the United Nations, the relationship of OIOS with other funds, programmes and agencies, as well as the Board of Auditors and the Joint Inspection Unit.
To improve the quality of its services, in advance of the Assembly's review of its mandate, the OIOS has conducted a self-evaluation in 2004. Among the main areas in need of improvement identified in that exercise, the report lists the need to ensure full delegation of authority to the Office in such areas as personnel action. The Office also views its current funding arrangements with funds and programmes, under which the Office is reimbursed for its services on an ad hoc basis through memorandums of understanding, as seriously flawed and constituting a potential conflict of interest. The first interim report of the Independent Inquiry Committee headed by Paul A. Volcker also recommended strengthening the independence of OIOS in budgetary matters, extending such independence to the arrangements with funds and programmes. To that end, OIOS is proposing that resources approved for new activities must include allocations for internal oversight coverage.
Also according to the report: two Internal Audit Divisions have initiated assessments of their operations; the Monitoring, Evaluation and Consulting Division conducted a self-assessment in 2004; the Investigations Division completed a peer review in 2005; and the Office has updated its manuals for investigation, inspection and evaluation, which are available on the OIOS website. The updated internal audit manual is under way. Recognizing the need to operate in a fair and transparent manner to earn the confidence of United Nations management and staff, the Office has been steadily increasing its collaboration with legislative bodies and its clients. Among recent efforts, the report mentions thematic programme evaluations, horizontal collaborative audits, management-consulting assignments and joint investigations.
The OIOS annual budget totalled $32.2 million, of which $12.3 million was funded from extrabudgetary resources. With more than 70 per cent of the Office's clients away from Headquarters funded from extrabudgetary resources, the inadequacy of resources available for mandated oversight coverage of extrabudgetary activities continues to be a concern. If funding is not forthcoming, as of 1 January 2006, the OIOS may have no choice but to discontinue auditing certain extrabudgetary activities.
The Committee also had before it the OIOS report on the management of subregional offices of the Economic Commission for Africa, which are mandated to act as an operational arms of the Commission, facilitators of subregional economic cooperation and integration and centres for policy dialogue (document A/60/120). The document contains 15 recommendations seeking to increase effectiveness of the offices' programme delivery. The OIOS notes the need to increase their capacity, improve coordination with substantive divisions of the Commission, energize their outreach and enhance their value for United Nations development agencies.
According to the report, the main problem of the subregional offices was their inability to implement the full scope of their mandates, which are not supported by adequate resources. The offices' actual role in the overall policy analysis and technical assistance of the Commission is not clear; and their visibility in the subregions is limited. The OIOS concludes that the offices' support to regional economic communities varies greatly in scope and effectiveness.
The OIOS also mentions that professionals at the offices did not always have all the skills required, and they rarely made significant inputs in formulating key programmes. The offices have insufficient capacity to provide the framework either for knowledge sharing or disseminating best practices in their subregions. Also noted in the report is the lack of clarity regarding the balance between operational and analytical activities at subregional offices. Their impact as facilitators of integration activities of the United Nations system was barely discernible. Among the main reasons for that are "gross insufficiency" of financial resources and "little support" from ECA headquarters.
The OIOS believes that the impact of the subregional offices could be enhanced through more focused programming, creative dissemination of information emphasizing electronic means, and better coordination. The offices would benefit from better alignment of their staff expertise and skills with subregional priorities and from consistent maintenance of their staff strength at budgeted levels. Reliable mechanisms for cooperation among the offices, as well as coordination with the Commission's headquarters should be put in place, and administrative support to the offices should be strengthened. Initiative, flexibility and multidisciplinary teamwork should be promoted, and periodic reviews of the offices' programme delivery should become the norm. Most importantly, operational resources of subregional offices should be strengthened along with their information and communication technology capacity in order to support outreach to all countries in the subregions.
The OIOS noted with satisfaction the commitment by the management of the Commission to follow up on the recommendations. The comments of management were reflected in the report.
The Committee also had before it a report of the Secretary-General on measures to strengthen accountability at the United Nations (document A/60/312), which included efforts to strengthen the system's accountability framework and oversight mechanisms, ensure ethical conduct and enhance transparency.
Among other measures, the Secretary-General's report included a proposal to create an independent office of ethics and, in response to widespread allegations of sexual exploitation at some peacekeeping operations, a Conduct and Discipline Unit in the Department of Peacekeeping Operations at United Nations Headquarters. In May 2005, the Secretary-General replaced the Accountability Panel with the Management Performance Board, which has clearer responsibilities than the panel. And in August 2005, the Secretary-General commissioned a full financial and internal control review of the United Nations current procurement system.
A key element of the Secretary-General's report is the creation of a United Nations Oversight Committee. This responded to the General Assembly's request (resolution 59/272 of 23 December 2004) for a high-level follow-up mechanism that could feed the recommendations of the system's oversight bodies into the executive management process. The Oversight Committee would act as an independent advisory panel to the Secretary-General and report directly to the General Assembly.
In its report (document A/60/418), the Advisory Committee on Administrative and Budgetary Questions (ACABQ) said the Assembly might wish to determine whether the creation of the Oversight Committee included in the Secretary-General's 7 September 2005 bulletin (document ST/SGB/2005/18) fully addressed the request contained in its resolution.
The Advisory Committee questioned the appropriateness of the Oversight Committee's mandate to provide advice on the priorities, long-term strategy and annual audit work plans of oversight bodies since that could question their independence. The Committee also questioned a statement in paragraph 26 of the report which said Oversight Committee members "shall act in an independent capacity while performing their advisory role on the Committee". The Advisory Committee noted that paragraph 2.4 of the bulletin stated "The Chairperson and members appointed from the Secretariat may not participate in deliberations relating to matters affecting their own department or office." The report said it could be difficult for the internal members -- senior officials of the Secretariat -- to act in an independent capacity. Yet, the absence of members could negatively affect its performance. The Advisory Committee said many aspects of the Oversight Committee's operation should be reviewed to mesh with the Assembly's upcoming actions on the World Summit Outcome.
The Advisory Committee also said many details included in the Secretary-General's report on accountability, which was prepared in June 2005, would have to be reviewed with an eye to the Summit Outcome.
The Committee also had before it a report of the Secretary-General on the contribution made by the Department of Management to the improvement of management practices (document A/60/342), which covers the period from January 2003 through June 2005. Initiatives cited include implementation of the automated space management and automated asset management systems, the vehicle usage system ("CarLog"), the inter-agency systems contracts initiative, the global airline agreement for United Nations organizations, funds and programmes, the United Nations global marketplace, the generic job profiles project, the development of human resources standard data reports, the enhancement of the Electronic Performance Appraisal System (e-PAS) and the Intranet support to budgeting, among others.
Commenting on this document, the ACABQ (document A/60/418), notes the conspicuous absence of a quantification of the impact of the measures taken by the Department of Management. The Advisory Committee believes that further elaboration is required on the role of the Department in promoting improved management practices in the Secretariat as a whole. In this connection, the Committee recalls its observations in its report on the proposed programme budget for the biennium 2006-2007 concerning the importance of the management policy function.
In the opinion of the Advisory Committee, as far as the plan for the reduction of duplication, complexity and bureaucracy in the Organization's administrative processes and procedures is concerned, the Secretary-General's report "merely provides a snapshot of the current status of some of the issues identified by the Office of Internal Oversight Services, but does not present a time-bound plan". More importantly, the report does not set out how the administration proposes to go about implementing an Organization-wide approach to overcoming duplication, nor does the report set out a mechanism for reviewing working practices and procedures. Information technology is not a solution by itself, but it can serve as a tool for the improvement of administrative processes, procedures and efficiency.
Statements on Board of Auditors
ANDREW S. HILLMAN (United States) said he believed additional action was needed to ensure that the Office of the United Nations High Commissioner for Refugees (UNHCR) does not jeopardize its future by continuing to deplete its reserves. The United States was concerned about the significant amount maintained by the UNHCR in accrued but unfunded liabilities for end-of-service and post-retirement benefits, and the agency's $336 million in long-term liabilities was an enormous burden. He noted that the ACABQ report was concerned about the issue. He added that was essential that the UNHCR act in a fiscally responsible manner by limiting its future staff growth.
On the issue of the Board of Auditor's report on implementation of recommendations from the 2002-2003 biennium, he noted the progressive increase in recommendations made by the Board during the past three bienniums and acknowledged the 46 per cent implementation rate, despite the increase in total recommendations. He was concerned about the increase in overall percentage of recommendations that had not been implemented at all, and urged additional improvements to boost the rate of implementation.
He said it was vital for the United Nations system to implement anti-fraud and anti-corruption mechanisms and strongly supported the recommendation outlined in paragraph 137 of the Board's report, calling on the Secretariat to expedite implementation of such mechanisms through the United Nations system. He also asked how the United Nations Office for Project Services (UNOPS) would address the issue of the risks of budget over-runs.
Mr. AMAR (Libya) said he associated himself with the statement made by Jamaica, on behalf of the "Group of 77" developing countries and China. He thanked the Board of Auditors for its statements and welcomed its recommendations for the funds administered by the UNHCR and thanked the ACABQ for its report and recommendations. He believed the recommendations should be broadened to ensure more transparency at all stages, especially as regarded the agencies. He was concerned about the late publication of the reports and would like earlier release of the reports. He also urged rapid implementation of the Board's recommendations.
HUSSAIN A.I. AL BATTAWI (Iraq) expressed appreciation for the efforts of the Board of Auditors for 2002-2003. He supported the substance of the position of the "Group of 77" developing countries and China on the matter and associated himself with those who had expressed regret at the late issuance of relevant documents. He appreciated the fact that the Board had consolidated its reports. Implementation of the Board's recommendations had reached a 46 per cent rate. Some 230 recommendations were being implemented, and that gave him some cause for optimism. At the same time, it was important to monitor the implementation of the rest of the recommendations and look at the recommendations that had not been implemented.
Introduction of Reports
Presenting the OIOS annual report to the Committee, INGA-BRITT AHLENIUS, Under-Secretary-General for Internal Oversight Services, in her first address to the Committee, reiterated the three key goals identified during the Office's self-evaluation last year: ensuring the independence of the OIOS, establishing a high-level oversight coordination mechanism; and developing a system for reporting on the implementation of recommendations. Those were being implemented. Of particular importance to the OIOS was the issue of its independence in line with its mandate and consistent with the best practices for oversight and good governance.
Regarding the recommendations issued by the Office, she said that compared to the previous 12-month period, there was a 43 per cent increase in the number of recommendations issued. That was due to the increase in the oversight activities undertaken, particularly investigations and audits of peacekeeping activities. That was clearly shown in the number of oversight reports: 266 in the last
12 months, compared with 147 in the preceding period.
Turning to the implementation of the OIOS recommendations, she said that some 50 per cent of all recommendations had already been implemented by management. The percentage of critical recommendations implemented stood slightly lower, at 43 per cent. When implemented, the Office's recommendations could result in savings and recoveries estimated at $35.1 million as a result of increased efficiency and effectiveness. The report included guidelines for measuring the impact of economies and savings generated by the recommendations.
Presenting highlights of the Office's activities, she said that investigations at the United Nations Organization Mission in the Democratic Republic of the Congo (MONUC) and other peacekeeping operations had identified serious cases of sexual exploitation and abuse and the need for increased prevention and detection. As a result, in July 2005, the OIOS had received additional resources to handle existing and emerging cases. Investigations in the area of procurement had continued dealing with allegations of corrupt behaviour by United Nations staff, accountability for theft of United Nations property, and collusion between United Nations staff and vendors.
YOO DAE-JONG (Republic of Korea) said he appreciated the OIOS report and believed it was full of detailed information and recommendations to improve the productivity and accountability of the Organization. He noted the efforts by the General Assembly and the Summit Outcome to increase the independence of the office and provide more expertise to carry out its mandate. He noted that of 194 posts, 103 are funded from extra-budgetary resources and more than one third are not regularly funded.
He noted that that attention to abuses in the peacekeeping operations and procurement items took a large part of the Office's attention. He noted the Office's efforts to improve its risk management framework and focus on areas exposed to fraud, risk and abuse and questioned how the Office shifted its manpower once areas of risk were identified. The Office's primary functions -- including auditing, monitoring and evaluation and investigations -- were stretched across the board. He said it was vital to ensure that the body's chain of command was in place so the office could react to developments around the globe efficiently and promptly.
KEIKO KURODA (Japan) noted that about half of the 2004 recommendations were implemented with substantial savings and she urged the departments to take concrete action to implement all outstanding recommendations. She welcomed the efforts to enhance the transparency of the OIOS and expected it would take an active role to improve its transparency and demonstrate its efficiency.
Ms. AHLENIUS then introduced the OIOS report on the inspection of the subregional offices of the Economic Commission for Africa (document A/60/120), saying that those bodies were a vital part of the ECA and their role was very important. The inspection had found that, although the offices participated in the Organization's development activities in the countries where they were located and collaborated with some of the regional economic communities, their mandate was fulfilled only partially. The offices were weak in performing their role as operational arms of the ECA in the subregions, and the Office believed that their mandated core functions should be supported by adequate resources.
NANCY SOYKA-HURTZ, Principal Officer, Office of the Under-Secretary-General, Department of Management, introduced the Secretary-General's reports on measures to strengthen accountability at the United Nations (document A/60/312) and the contribution of the Department of Management to the improvement of management practices and time-bound plan for the reduction of duplication, complexity and bureaucracy (document A/60/342). She said many of the measures described in the reports would be influenced by the Outcome Document of last month's high-level session.
A member of the ACABQ, E. BESLEY MAYCOCK, introduced a related report of that body (document A/60/418), saying that many measures described in the accountability report had been overtaken by recent events, and the Advisory Committee would address them in the overall context of the implementation of the 2005 World Summit Outcome.
ELIZABETH GALVEZ (United Kingdom), speaking on behalf of the European Union and associated States, said she appreciated the efforts taken within the Secretariat, so far, to strengthen accountability, transparency, ethical conduct and oversight. It was an issue of great concern to the Union and one where effective action was overdue. The Union welcomed the creation of the management performance board, the policy committee and the Oversight Committee, as well as the emphasis placed on the appropriate training for senior mission leaders. On the issue of ethical conduct, the Union believed that the more stringent rules of financial disclosure should also be applied to all staff in the OIOS, the Procurement Service and the staff in the Department of Management and missions who deal with financial decisions, including staff members below the level of D-1. The Union was anxious that the anti-fraud and corruption policy be effected speedily.
At a later date, she said, the Union would issue its position on the need for an independent oversight committee external to the Secretariat that can act as a source of advice to the General Assembly. The Union would see that body as supplementary to the internal oversight committee as described in section 4, part A of report A/30/312. The Union believed that internal committee would help the Secretary-General ensure that his programme managers implemented the recommendations of oversight bodies.
On the issue of the OIOS report on the subregional offices of the ECA, she said the Union read the report with mounting concern and found it a catalogue of deficiencies and failings. The subregional offices accounted for 25 per cent of the regular budget funding of the ECA and they were supposed to be key to delivering ECA objectives at the subregional and national level. She said there appeared to be a lack of strategic direction from ECA headquarters on how the subregional offices should be integrated into programme delivery. The lack of specialist skills and operational experience among the staff was alarming and she questioned what criteria were used to recruit staff and what training programmes were created to develop their capacity. She said the Union wanted to pursue its concerns in more detail with the ECA during the informal consultations and trusted a representative would be available to answer questions.
PHILLIP TAULA (New Zealand), also speaking on behalf of Australia and Canada, said that last month's Summit had highlighted the vital importance of accountability, oversight, transparency and ethics. He welcomed the range of measures already undertaken by the Secretary-General in the area of oversight, including the more clearly defined role of the new Management Performance Board and its focus on the performance of individual senior managers. He also concurred with the comments about the importance of having clearly defined responsibilities and performance expectations at all levels. However, those needed to be coupled with mechanisms to ensure that there were consequences associated with poor performance.
There was a broad agreement that effective oversight machinery was an essential part of the accountability chain, he continued. He welcomed the agreement to strengthen, as a matter of priority, the OIOS. That was a necessary, but only a first, step. Also needed was effective and independent, external evaluation of United Nations oversight, as agreed during the Summit.
Turning to the report on the contribution of the Department of Management, he said that it fell short of what had been asked. He noted the measures taken by specific managers in the Department. However, the report said nothing about what the Department did, or should do, to develop and promote good management practices within the Secretariat as a whole. It had been for that purpose that the Assembly had approved the creation of a Management Policy Office within the Department. He would like to see further quantification of the impact of the measures taken by the Department in the report. Improvements in efficiency needed to be measured in real terms, both to remind staff and to reassure Member States that the Secretariat was doing everything it could to remove bureaucratic and inefficient management practices.
Finally, concerning the request for the time-bound plan for eliminating duplication, complexity and bureaucracy, the report merely summarized the status of some of the issues raised by the OIOS during the fifty-eighth session, he said. But the central issue raised by the OIOS had been the need for an enterprise-wide approach to tackling that issue on an ongoing basis. He urged the Secretary-General to develop that time-bound plan in the coming year.
HITOSHI KOZAKI (Japan) welcomed the establishment of the Oversight Committee as a positive step, but expressed disappointment that it could not have been done earlier, given an urgent call by Member States for an operative mechanism to ensure full and expeditious implementation of recommendations of oversight bodies. One of his impressions was that there had been no concrete actions and tangible results coming out of working groups and reviews undertaken in the past and it was, thus, too soon to make an assessment of the newly established body. He hoped that his perception would soon be changed.
He noted comments by the ACABQ as relevant. His delegation was ready to take a look at those issues, but they would be better considered in the context of consideration of the Summit Outcome. As for the Department of Management contributions, he concurred with the ACABQ on the matter. He was keen to learn about policy initiatives taken by the Department, as well as its leadership functions in management reform of the Secretariat. However, the Secretary-General's report excluded that important element and did not live up to the expectations of his delegation. Likewise, the report on "the time-bound plan" did not clearly demonstrate the Department's proactive approach and strategy to deal with those pending issues. Therefore, he requested a comprehensive follow-up report to be submitted to the General Assembly as soon as possible through the ACABQ. He would like to see positive and productive interactions on that agenda item. Turning to the OIOS report, he supported the United Kingdom on how the agenda item could be dealt with in the Committee.
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