REPORTS ON OVERSIGHT OFFICE INTRODUCED IN FIFTH COMMITTEE

Press Release
GA/AB/3045

REPORTS ON OVERSIGHT OFFICE INTRODUCED IN FIFTH COMMITTEE

The Office of Internal Oversight Services (OIOS) has two distinct roles to play -- to promote better management and to deter corruption, waste, fraud and mismanagement throughout the United Nations system -- the Fifth Committee (Administrative and Budgetary) was told this morning as it considered the reports on activities of that Office.

Presenting his Office's reports, the Under-Secretary-General for Internal Oversight Services, Karl Th. Paschke, said his priorities included areas where considerable money was at stake and where the nature or environment of United Nations activities were particularly risky. Those included peace-keeping missions, humanitarian activities and procurement.

He stated that the Office had become a meaningful part of the United Nations management culture and had embraced the principles of geographical balance and of professionalism in its personnel decisions. He said he was ready to brief the Fifth Committee three to four times a year.

Introducing the report of the Joint Inspection Unit (JIU) on the issue, JIU Chairman Fatih Bouayad Agha, said the Unit had made little or no comments on some reports of the oversight Office, particularly those on specific investigations and inspections. That was because it lacked access to original records. The situation should be overcome and the JIU intended to undertake coordination with the Office in that regard. The Unit aimed to strengthen and refine its cooperation with the Office in order to reinforce oversight functions.

The Committee will meet again at 10 a.m. tomorrow, 22 November, to discuss the United Nations common system.

Reports Introduced

A note of the Secretary-General transmits the report of the Office of Inspections and Investigations, 1993-1994 (document A/49/449). The report covers the work of the Office for the period since its establishment on 1 September 1993 until 31 July 1994, after which it was succeeded by the Office of Internal Oversight Services.

In his letter of transmittal, Mohamed Aly Niazi, Assistant Secretary-General, Office of Internal Oversight Services, said during its one year existence, the Office for Inspections and Investigations had saved millions of dollars through prevention of unwarranted expenditure and recovery of overpayments.

The report said inspections of the Economic Commission for Africa (ECA), the Economic and Social Commission for Western Asia (ESCWA), the Centre for Human Rights, the Economic Commission for Europe (ECE) and staff training activities had been completed by the end of August, 1994. Resident auditors were posted at the United Nations Protection Force (UNPROFOR) and the United Nations Operation in Somalia (UNOSOM II) in July 1994.

A note by the Secretary-General transmits a report conveyed to him by the Under-Secretary-General for Internal Oversight Services on the programme and administrative practices of the Centre for Human Rights at Geneva (document A/49/892). The report was submitted by a team from the investigations Office, which had visited the Centre from 13 to 22 June 1994 and met with the United Nations High Commissioner for Human Rights, the Assistant Secretary-General for Human Rights and other managers. The team looked at the Centre's work in 1992-1993, in the first six months of 1994 and in relation to paragraph 35 of the 1992-1997 medium-term plan, on the promotion and protection of human rights, and its proposed revisions. The views of the oversight Office on actions the Centre had taken in response to the team's suggestions as of 31 March 1995 are contained in an appendix.

The report states that, while the Centre's programme of work is mainly meant to service the human rights organs, it is inadequate for timely responses to serious violations of human rights or as a basis for significant support to develop an institutional framework to promote human rights. While the Vienna Declaration and Programme of Action provides an opportunity to rethink the Centre's priorities, little has been done to translate the Programme of Action into strategic objectives. The programme of work for 1994-1995 remains the same as for 1992-1993 even though resources have been raised by 20 per cent. The proposed revision of the medium-term plan for 1992-1997 adds a new subprogramme, which subsumes some of the functions of the High Commissioner but does not articulate the Centre's plans to address the Vienna Declaration's recommendations.

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For the most part, the Centre services human rights organs such as the Commission on Human Rights and the Subcommission on Prevention of Discrimination and Protection of Minorities. The team from the investigations Office suggests that the Centre provide more substantive servicing in research and technical analysis to help members of those organs prepare their work. The team adds that the Centre should assess the Vienna Declaration's implications on its work programme and streamline its work.

The team recommends an urgent and fundamental reappraisal and restructuring of the Centre's programme to focus on strategies that strengthen its effectiveness and clearly define the Centre's mission in general and that of the High Commissioner's Office in particular. That is essential to set the level of additional resources needed. After that, its secretariat should be reorganized so as to facilitate the implementation of interrelated objectives and priorities. When the report was written, both exercises were expected to be completed by December 1994 to reflect the new programme structure in the proposed budget for 1996-1997. Vacant posts of chiefs of branches and sections should not be filled until the reorganization has taken place and the purposes of those posts are determined.

Annexed to the report are the oversight Office's assessments of the actions the Centre had taken to comply with the recommendations as of 31 March. On reappraising and restructuring the Centre's work programme to improve its effectiveness, the report states that the Centre's reaction had been slow. It was only after a personal intervention last January by the Under-Secretary-General for Internal Oversight Services, on a visit to Geneva, that the High Commissioner committed himself to starting a process that would begin the restructuring in March. The first phase, to identify weaknesses in existing work methods and determine changes to address problems identified, has already started. The last phase, which had been scheduled for June this year, was to determine the nature of changes needed to address the priorities of the Vienna Programme of Action.

Further, the oversight Office states that the High Commissioner had indicated last January that consultants were being hired to help adapt the Centre's secretariat to the new priorities emanating from the reorganization of the work programme. Their work was to have been completed by June. The Department of Administration and Management at Headquarters had enforced the recommendation that vacant posts of chiefs of branches and sections should not be filled until the restructuring was over.

The oversight Office opposed a plan to name an official at the level of Director (D-2) to strengthen the Centre's executive capacity as such a move would create an additional hierarchy level between the head of the Centre and the branch chiefs. Instead, the post should be filled at a lower level, similar to those at other United Nations bodies. However, a person was sent on 1 December 1994 to control spending and establish personnel procedures.

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In a note by the Secretary-General that transmits the comments of the Joint Inspection Unit on final reports produced by the Office of Internal Oversight Services (document A/50/459/Add.1), the inspectors caution against excessive use of outside expertise. The Inspectors recommend that the United Nations Secretariat provide the Assembly with transparent information on the consulting firms it is contracting out to and the source of financing.

A note by the Secretary-General transmits a report from the Office of Internal Oversight Services on the programme and administrative practices of the secretariats of the ECA, ESCWA and ECE (document A/49/891). The reports were initiated by the investigations Office and are contained in appendices. According to one submitted on 16 November 1993, the ECA is in a unique position to contribute to the definition of a new African development strategy emphasizing inter-African trade and reduced dependence on trade outside the region. It has the mandate and the institutional framework. That strategy should be coherent, comprehensive and credible. However, for the ECA to contribute to the development process, the skills of many of the current staff should be upgraded by educating them in universities and producing an in-house publication.

The existing mechanism for programme oversight was weak and dispersed. The ECA should place emphasis on an analysis of trade patterns of African countries with each other and with outside trading blocs. Fragmentation at the levels of programme formulation and management and control could be corrected by having a single oversight mechanism coordinate all ECA activities. As for administration, it states the three focal points for financial authorization should be integrated and authorization for all funds centralized in one division. The administrative function should be upgraded by staff training. Headquarters should urgently help the ECA Division of Administration by sending to Addis Ababa for three or four months a team of knowledgeable staff at the junior Professional and senior General Service levels. The audit function should be strengthened by assigning to ECA one or two resident auditors, more frequent visits from Headquarters audit offices or by subcontracting the audit function to outside firms.

On ESCWA, a report submitted on 16 November 1993 states that the move of the Commission's headquarters from Baghdad to its temporary site in Amman had harmed its work. As a result, there is no comprehensive strategy running through the entire work programme and linking its elements. The quality of output was irregular and the programme of work lacks direction and focus. The team concluded from its review of a large part of the outputs implemented since January 1992 that their results were often disproportionate to the resources used. There is no assurance that resources appropriated by the General Assembly were being used efficiently.

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As of 31 March, ESCWA management had complied with the recommendation that it fundamentally review and restructure its work programme. The revised programme had been approved by the seventeenth session of ESCWA and the medium-term plan for 1992-1997 revised to develop a more focused work programme. The revised medium-term plan has been endorsed by the Committee for Programme and Coordination (CPC). A new organizational structure for the secretariat, which cuts the number of divisions from nine to seven, was finalized to simplify the existing structure and place programme oversight under the Deputy Executive Secretary.

A report submitted on the ECE on 7 October 1994 states that the Commission's membership had grown from 34 to 54 in three years; half its members are States in transition. The ECE gave priority to the protection of the environment, transport, statistics, economic analysis and trade facilitation. It accorded importance to helping central and eastern European nations transform into market economies. However, it will have to devote more resources to monitoring their situation and to researching and analyzing the problems of their transition.

There should be a single oversight mechanism to programme and coordinate all ECE activities. The role and functions of the senior officers in the Office of the Executive Secretary should be redefined and their oversight functions integrated within a single oversight tool.

As of 31 March, the ECE had sought to provide more resources for its economic analyses in the 1996-1997 budget proposals by requesting a new Professional post at the Senior Officer level (P-5) and redeploying another. On the need to create a single oversight mechanism, the functions of the officials under executive direction and management would be readjusted to avoid overlapping with those of the Senior Adviser, who is responsible for central oversight and coordination at the Commission. The ECE also intends to provide the mechanism with one Professional post at the Second Officer level (P-3) and one General Service post in the context of the 1996-1997 budget.

In its report, the JIU states that there is a need to eliminate duplication and reinforce collaboration between ECA, specialized agencies, regional organizations and global secretariat entities in the economic and social sectors. On the issue of the United Nations New Agenda for the Development of Africa in the 1990s, the Inspectors state that the ECA needed a more streamlined mandate and organizational strategy. That would enable it to actively help governments design or strengthen macroeconomic policy frameworks, public sector reforms, investment promotion strategies and commodity diversification schemes. It would also concentrate its expertise on programmes outside the competence of other United Nations bodies, such as intra-African economic cooperation and integration and the collection, analysis and dissemination of development statistics on Africa.

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The Inspectors expressed the view that the oversight Office's recommendations have contributed to improving the ESCWA secretariat's quality of work. The ECE, for its part, should accord priority to the special needs of countries in transition to market economies. The oversight Office could have highlighted the need for the ECE secretariat to lead in coordinating the programmes and activities of other United Nations system organizations in support of countries in central and eastern Europe.

A note by the Secretary-General transmits a report on the oversight Office's activities (document A/50/459) for the period 15 November 1994 to 30 June 1995. General Assembly resolution 48/218B of 29 July 1994 established the Office to enhance oversight functions within the United Nations through intensified evaluation, audit, investigation and compliance monitoring. On 24 August 1994, the Assembly approved the nomination of Karl Th. Paschke as Under-Secretary-General for Internal Oversight Services. He assumed office on 15 November 1994.

According to Under-Secretary-General Paschke, internal oversight in the United Nations had been underdeveloped and understaffed for almost 50 years. Some of the deficiencies detected in the United Nations are linked to the weakness of oversight. Bureaucracy has grown without pruning, procedures and structures have become too rigid and overlapping responsibilities not adequately addressed let alone eliminated.

Other factors hamper management in the United Nations, according to the report. Rules and regulations are too complicated; the personnel system is cumbersome; and administrative skills are not well distributed in the Organization. Horizontal communication is lacking, with different departments not knowing enough of each other's work. That leads to the danger of unintentional overlapping and preoccupation with turf. Efforts must be made to eliminate the tendency of staff to shun accountability.

Those problems cannot be solved by quick-fix remedies, according to the report. No organization of the United Nations size responds willingly and expeditiously to reforms. Fundamentally changing a corporate culture that has grown for about 50 years would be difficult even in the private sector and it is more so in an international organization with staff from some 160 countries, with diverse perceptions of public service. The United Nations simultaneously faces huge new challenges and shrinking resources. Discussions on reforms tend to turn into political issues in legislative bodies. There are many perceptions about what the United Nations is and should be among its 185 Member States. That frequently produces mandates and requests that are less than clear to the Secretariat.

According to the report, the OIOS has to be systematic and thorough and not aim at short-lived actions. It should provide the United Nations with continuous oversight that promotes effective management and prevents future

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problems. The OIOS has begun to succeed in its tasks. Its deterrent and proactive roles are being recognized, creating hopes that it can be more preventive than detective. However, there is a lot of fear about the Office and many United Nations managers are not used to accepting criticism. That must change and managers must stop being defensive and start a dialogue with the Office. The adoption of a set of internal control standards by the United Nations would raise managers' support for adequate internal controls. The Office will help identify control objectives for different categories of operations.

From 15 November 1994 to 30 June 1995, the Office has identified cost saving and recoveries worth some $16.8 million, and actually realized about $4 million. The biggest cost savings identified were from the prevention and recovery of overpayment and the prevention of excessive or unjustified spending.

The major areas for oversight were related to peace-keeping, humanitarian and related activities and procurement. Its peace-keeping audits showed cases of excessive compensatory time off by military and civilian personnel, overpayment of subsistence allowance to international staff and delays in their recovery, unauthorized use of aircraft for non-official purposes and lack of budgetary controls. The integrity of accounting records were questionable. There were 224 audit recommendations in the area of procurement. Significant findings included a lack of proper training and experience by some procurement officers and of budgetary controls. A lack of fair and competitive bidding was noted and the United Nations vendor roster was not regularly updated. Improper evaluation of vendors' proposals had led to the wrong choice of contractor. Also reported was delay by the contractor and a failure to penalize the vendor for not fulfilling contract terms. Goods delivered and services rendered were paid for without valid or established contracts.

The report states that management deficiencies were revealed, including weaknesses in internal controls and the failure of concerned officials to monitor the United Nations Access Control System project. The project's failure wasted more than $1 million.

Another note by the Secretary-General transmits a report from the Under- Secretary-General for Internal Oversight Services, on the review of the Field Administration and Logistics Division of the Department of Peace-keeping Operations (document A/49/959). The report was submitted by an investigative team which classified its findings into four broad categories: organizational, management, control and legislative. It states that the Division's staffing reflects a disproportionate number of short-term and military personnel, that many posts have not yet been officially classified and a large number of staff do not have written job descriptions. The Division is too compartmentalized

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and bound by some financial regulations and procedures that have impeded its efficiency.

The report states that 89 per cent of the Division's staff -- 157 out of 177 -- were against posts funded from the support account for peace-keeping operations. A total of 50 of them are on contracts of fewer than 11 months. Military officers on loan from Member States constituted about 19 per cent of the Division's staff, with a majority of them in the Logistics and Communications Service. Current recruitment practices and related funding limits are not conducive to attracting qualified individuals. The need to train new people because a "short-timer" had left had adverse effects on the Division's workload. The paperwork involved with preparing numerous short- term contracts could be avoided with more appropriate staffing arrangements. The Division could consider granting two- to three-year contracts with 60-day cancellation clauses under new limited appointments that could allow for employments of three years.

The report states that the Division has not provided enough safeguards for resources and the Organization could face considerable financial risk. Major areas of concern include potential unrecorded liabilities, inadequate asset control and uncertainty over insurance coverage. Regarding potential liabilities, a flow of previously unrecorded claims for contingent-owned equipment and aircraft use was likely, without their dollar value being known. Unless authoritative procedures for dealing with contingent-owned equipment are introduced, the Organization would continue facing risks. While the Organization could be paying too much for additional war-risk insurance, it might also lack adequate coverage for third-party liability. There are no procedures to ensure that civilian air carriers contracted by troop- contributing countries are sufficiently insured to protect the United Nations from third-party liability.

On legislative issues, the report states that the method of using 8.5 per cent of the civilian component of peace-keeping operations to establish a level of funding for the support account is no longer valid. It was based on conditions that once included a particular ratio of military to civilians and essentially ignored the backstopping workload associated with the military component. The flat rate method is no more appropriate for calculating support resources now. The report welcomes the Assembly's decision to annually review the current method of funding the support account for peace- keeping at the rate of 8.5 per cent of the cost of the civilian component. The first should be no later than next spring.

The team recommends that the Department of Administration and Management should urgently seek alternative war-risk insurance arrangements, such as fixed-price coverage for extended periods of time. The current practice of paying for such coverage on contractor-by-contractor basis could lead the United Nations to a "financial haemorrhage".

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The Division and the Department should review the staffing situation and suggest a more appropriate mix, reflecting fewer short-term staff, to limit military officers to purely advisory and technical positions and thoroughly screen them before their placement.

The report also recommends that the Division's two units on African operations should be merged. The Division/Department should take immediate steps to determine the extent of the Organization's financial obligations regarding potential claims from troop-contributing countries and to address the issue of appropriate insurance coverage.

The JIU agrees that military officers should be limited to positions that have technical advisory capacity. Also, it is useful for the Assembly to receive accurate estimates of the substantial financial implications regarding war-risk insurance. Some troop-contributing countries had expressed dissatisfaction with some procurement practices and logistic support by the Field Administration and Logistics Division.

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