FIFTH COMMITTEE DISCUSSES UN COMMON SYSTEM OF SALARIES, INTERNAL OVERSIGHT SERVICES

Press Release
GA/AB/3047

FIFTH COMMITTEE DISCUSSES UN COMMON SYSTEM OF SALARIES, INTERNAL OVERSIGHT SERVICES

The Advisory Committee on Administrative and Budgetary Questions (ACABQ) should study the effect that a drastic salary increase for the United Nations system staff could have on the Organization's present dire financial situation, the Fifth Committee (Administrative and Budgetary) was told this afternoon as it discussed the United Nations common system and Internal Oversight Services.

China made that suggestion while speaking on the common system of salaries. Its representative added that the conditions of service in the United Nations system had not lost its competitiveness. In that regard, the Secretariat should provide information on the number of applicants for vacant posts and the number of staff who had left to take up better paying jobs in recent years.

Botswana said the comparative studies done by the International Civil Service Commission (ICSC) on remuneration in the Organization for Economic Cooperation and Development (OECD) and the World Bank had not clearly demonstrated the uncompetitiveness of the common system's remuneration level. Evidence showed the Organization did not face acute recruitment and retention problems. To the contrary, the United Nations Secretariat still received numerous applications from job-seekers.

The ICSC advises the Assembly on salary and compensation issues, including post adjustment and pension, for professional and higher level staff as well as on General Service remuneration and conditions of service. It encompasses 14 organizations which together with the United Nations itself participate in the United Nations common system of salaries and allowances.

Japan also spoke on the common system.

Spain, speaking for the European Union on the Office of Internal Oversight Services -- in a statement joined by Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and the Slovak Republic -- said that there was a need to correct the shortcomings identified

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in the Field Administration and Logistics Division of the Department of Peace- keeping Operations. That would ensure adequate support for peace-keeping missions. The structure of the Department of Peace-Keeping Operations, funded from the regular budget, should be made adequate to support a minimum number of missions.

The United States said the Office's recommendation for the adoption of a set of internal control standards should be implemented promptly. The United Nations reputation depended on its ability to convince the public that its resources were not squandered, that officials abided by the rules and that a new culture of accountability would be established, the United States representative added.

Prudent financial management should not be confused with Member States' duty to pay their dues on time, Malaysia said. Japan said it looked forward to a report on the United Nations access control system, which had been abandoned abruptly at a cost of more than $1 million, with no persuasive explanation advanced.

Statements on Internal Oversight Services were also made by the representatives of India and Norway.

The Committee will meet again at 10 a.m. tomorrow, Tuesday 28 November, to begin considering the reports of the Joint Inspection Unit (JIU) and administrative and budgetary aspects of peace-keeping operations.

Committee Work Programme

The Fifth Committee (Administrative and Budgetary) met this afternoon to discuss the United Nations common system and reports on activities of the Office of Internal Oversight Services.

On the common system, the Committee had before it, among others, the 1995 report of the International Civil Service Commission (ICSC) and the statements of the Administrative Committee on Coordination (ACC) on the conditions of service in the United Nations system.

On remuneration of staff at professional and higher categories, the ICSC asks the General Assembly to reaffirm the continued applicability of the Noblemaire principle. It also recommends that the 115 desirable mid-point of the United Nations/United States net remuneration margin should be restored in 1996. To make the margin 15 per cent higher than the United States federal civil service remuneration, it recommends a hike in the base/floor salary scale, equivalent to 3.1 per cent, effective 1 March 1996, and an increase in post adjustment indices by 5.1 per cent, as of 1 July 1996. (For background, see Press Release GA/AB/3043, of 20 November).

(The Noblemaire principle provides that salaries of staff at the professional and higher categories in the United Nations system shall be set by reference to the highest paid national civil service. For that, the United States federal civil service has been used as the comparator. The margin is the average percentage difference between the pay of United Nations staff in New York and that of the United States federal civil service. Base floor salary scale is a universally applicable scale for staff at the professional and higher categories and reflects the minimum net sums received by United Nations staff around the world. The post adjustment index measures living conditions of staff in a given location compared with costs in New York at a specific date. Post adjustment is a supplement to base pay and is calculated as a percentage of net base pay.)

The reports from the Office of Internal Oversight include those on the activities of the regional commissions, the Centre for Human Rights and the Field Administration and Logistics Division of the Department of Peace-keeping Operations. Reporting on its own activities from 15 November 1994 to 30 June 1995, the Office states that it had, among other things, identified cost savings and recoveries worth about $16.8 million, and actually realized about $4 million. (For background, see Press Release GA/AB/3045, of 21 November).

Statements on Common System

JULIAN MOKGATLE (Botswana) said the common system had served Member States well over the years and regretted the constant criticism directed at the staff of that system. There appeared to be no difficulty with the basic

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tenets of the Noblemaire principle. The constant revision of margins and grade equivalency measurements between the United States and the United Nations offered a potential solution to the Organization's pay system.

He fully supported the proposal to the base/floor salary scale, which reflected increases in the pay levels granted in 1995 in the comparator State. It was rather unfortunate that the conclusion reached to bring the level of the margin to the desirable mid-point of the range was based on a desire to close the gap between the United Nations-United States remuneration levels with that of the World Bank and the Organisation for Economic Cooperation and Development (OECD). He did not support the linking of the overall United Nations remuneration levels to those of selected sub-sectors of the United States federal civil service.

He said the reference studies on remuneration in the OECD and the World Bank did not clearly demonstrate the uncompetitiveness of the common system remuneration level. Evidence indicated that there were no widespread or acute recruitment and retention problems in the system. To the contrary, the United Nations Secretariat still received numerous applications from job-seekers. The current structure of the ICSC should not be changed; the proposed tripartite structure need not necessarily further the consultative machinery.

HIDEKI GODA (Japan) said it was unfortunate that the ICSC was unable to submit the conclusions of its study of all aspects of the Noblemaire principle and all other related studies to the Assembly. His delegation understood that the common system was experiencing some difficulty in recruiting highly qualified people, especially from Member States whose currencies had appreciated against the United States dollar, and supported in principle the efforts to restore the system's competitiveness. He endorsed the Commission's call for the continued application of the Noblemaire principle based on the use of periodic checks to determine the highest-paid civil service and the use of a margin range that was appropriate in relation to the value of expatriate benefits. At the same time, the Secretariat must be secure and maintain the highest standards of efficiency, competence and integrity of staff.

He said a change in the comparator should be considered carefully as it would affect the entire structure of the common system and not only the level of remuneration. In comparing the remuneration at OECD and the World Bank with that of the common system, all factors, including the mandate and the structure of each organization, should be considered. An increase in remuneration was needed, taking into account the recommendations of the ICSC. Japan supported an increase in the base/floor salary, with a greater increase for the higher grades and a smaller one for the lower ones. The final decision on post adjustment should be deferred to next year, when the ICSC would have completed its consideration of all its related aspects.

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It was regrettable that the Coordinating Committee for International Staff Unions and Associations of the United Nations System (CCISUA) had followed Federation of International Civil Servants Associations (FICSA) in withdrawing from ICSC, he said. He urged them to return. Neither the structure nor the process for selecting ICSC members should be changed as that could reduce its independence and impartiality. The Commission should try to work more efficiently and effectively. His Government regretted the fact that the Secretary-General had issued a bulletin announcing the suspension of the granting of permanent and probationary appointments without consulting with Member States. That action would not help the current financial crisis. It was a retroactive cancellation of the entitlement of current personnel and those who had passed the national competitive examination; it was not acceptable to the Japanese Government. No change should be made to fundamental personnel policy unless there had been consultations with Member States.

WANG XIAOCHU (China) said his delegation was not in a position to support all the recommendations contained in the ICSC report. Noting that in the past two years the Assembly had expressed concern about the Commission's consultative process, he said the problem was yet to be solved. The parties concerned should resume active consultation in a spirit of positive cooperation and greater flexibility. Any attempt to change the Commission status as an independent expert body would run counter to the purpose for which it was established.

Regarding the Noblemaire principle, he said it was a very complicated technical issue. In essence, it was meant to establish competitive conditions of service for staff of international organizations and was not intended to pursue the highest salary standards in the world, such as the World Bank and the OECD. Those bodies were quite different from member organizations of the common system in terms of the nature of their organizations and their financial mechanisms. The common system should continue to use national civil services as its comparators.

Continuing, he said the conditions of service in the common system should enjoy continuous improvement along with the economic development of Member States. However, he was not convinced that the present conditions as a whole had lost their competitiveness. The Secretariat should provide more specific information on the number of applicants for vacant posts and the number of staff who had left to take up better paying jobs in recent years. Because of the financial crisis faced by the Organization, he wondered what impact a drastic salary increase could have on the its dire financial situation. That should be studied first by the Advisory Committee on Administrative and Budgetary Questions (ACABQ).

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Statements on Oversight Office

TOMAS RAMOS (Spain), speaking for the member States of the European Union as well as Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and the Slovak Republic, said it was encouraging to note that the Office had made some savings for the Organization. Of the total amount of about $17 million identified as recoverable cost savings in the period up to 30 June, some $4 million had been realized as savings. The Union was aware that that did not necessarily represent the total sums of wastage in the Organization. It had noted the Office's view that waste in the United Nations was not worse than that in other public entities. He agreed with the recommendations for in-depth evaluation of the start-up phases of peace- keeping operations.

The shortcomings in the Field Administration and Logistics Division of the Department of Peace-keeping Operations should be rectified, to ensure adequate support for missions, he added. The department should be able to adequately support a minimum of peace-keeping operations. The problem of a lack of efficiency was a cause for concern as it could lead to losses of funds. The Union had raised the issue of the $3.9 million stolen from the United Nations mission in Somalia. From the investigations carried out by the Office, it had been apparent that excessive sums of money had been left to accumulate in the mission's office without sufficient security. It was surprising that four months after the internal audit of December 1993 had revealed the lack of security in the office, not one of the security measures recommended had been carried out. The Union noted that measures had now been taken on standards for safe management and to update the mission's accounts. It also agreed with the soundness of the recommendations made by an investigating team that had been to Somalia and was pleased that most of them had been implemented.

Regarding the use of personnel pilot project for the United Nations Protection Force (UNPROFOR), he said, the Union regretted the lack of orientation, supervision and the participation which should have been undertaken in the pilot project by the Field Administration and Logistics Division, the Office of Human Resources Management and the Office of Legal Affairs. He agreed with the final conclusions of the oversight Office that the pilot project might be a viable method to support peace-keeping operations, but only in cases where it was justified. The Union had doubts about the way in which the pilot project had been carried out. It would like to be assured that the implementation of that type of project in other missions would be developed with caution and that coordination existed among the different United Nations units.

ALFRED DECOTIIS (United States) said the report of the oversight office had validated the belief that an independent office reporting to the Assembly would make an invaluable contribution to improved oversight of the

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Organization. Some issues identified by the Office as requiring prompt attention had been addressed. However, much more was to be done. He endorsed the recommendation for the adoption of a set of internal control standards and expressed the hope that it would be implemented promptly.

He said senior managers would have to ensure compliance with recommendations. That appeared to be a problem in the Organization. A mechanism similar to that established by the oversight Office for tracking compliance should be established for the recommendations of external auditors. He welcomed the Office's recommendations to deal with weaknesses in the Organization, such as ineffective controls in peace-keeping operations. The Office of Human Resources Management should amend the related regulations in order to address the issue of nepotism.

The resources allotted to the Office in the coming years must be enhanced if it was to become a fully effective force for positive management change, he continued. He asked what measures had been instituted to preclude recurrence of losses and what actions were taken to hold accountable those individuals responsible for the losses. The United Nations reputation hinged on its ability to convince the public that its resources had not been squandered, that staff and officials respected rules and regulations and that a new culture of accountability and responsibility would be established.

FUMIAKI TOYA (Japan) said that, as the second largest contributor to the United Nations, Japan was interested in the reports of the Office. The Office should be accorded the cooperation it needed from programme managers, including free access to information and documents. It must have the mechanism to monitor the implementation of its recommendations and should be encouraged to make its reports public whenever possible to help Member States better understand and support its work. It would be necessary to establish a method for evaluation and to promote coordination between the evaluation unit and other parts of the oversight Office, such as the inspection unit.

He said the Office had paid attention to peace-keeping operations; it had been shocking that so many cases of lack of internal controls had been found. The current system did not seem to effectively ensure compliance with the rules and regulations, safeguard resources and maximize the operations' effectiveness and efficiency. Problems had been identified in procurement policy and in asset and inventory control. Such cases had been brought up repeatedly. Thus in the case of the UNPROFOR, resources were being wasted on an enormous scale; that situation should be rectified immediately. The Field Administration and Logistics Division should address the managerial deficiencies identified by the Office in order to improve support for peace- keeping missions. The United Nations access control system had been abandoned abruptly at a cost of more than $1 million, with no persuasive explanation advanced. Japan was not convinced that the reason was simply mismanagement and looked forward to the Office's report on the matter.

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JADGESH DESAI (India) said a credible effort had been made to establish an effective oversight mechanism in keeping with the Assembly's mandates. India looked forward to a constructive and productive relationship between the oversight Office and the Board of Auditors, as two oversight entities. It was hoped that recruitment and promotion within the Office would take into account the principle of equitable geographical representation. India supported the Office's efforts to focus on high risk areas where potential savings would be greatest, such as peace-keeping and procurement.

There was deep concern for the problems of the Field Administration and Logistics Division which was the Secretariat's main support division for all peace-keeping operations, he continued. Considerable waste due to inadequate assets control, ad hoc decisions in the administration of field operations and poor staffing had been highlighted. Effective follow-up and compliance with the recommendations of the Office must be made.

He expressed concern about the findings on international contractual personnel. Issues, such as lack of financial checks of contractors and overpayment, should have been looked into and rectified before the international contractors personnel project was recommended to all peace- keeping operations. Abuses in procurement, such as for generators in Bosnia, fuel in Somalia and buses in Cambodia, was a cause for concern.

KJERSTI RODSMOEN (Norway) said her delegation was puzzled that the Secretary-General had not commented on the first annual report of the Office, which was an important document. Norway supported the priority areas chosen by the Office, which were humanitarian activities, peace-keeping and procurement in general. More intensive audit coverage was needed in those areas and management audit and consultancy should be augmented as well. A provision for enhanced outside evaluation would provide a better basis for judging the value of the various United Nations programmes.

He expressed regret that the programme for management training in the Secretariat had been stopped or deferred to next year due to the current financial crisis. That was a regrettable illustration of the consequences of Member States' failure to pay up their dues on time. The Office had stated that almost a third of the staff of the Field Administration and Logistics Division were on contracts of less than 11 months' duration. Current recruitment practices and funding limits were not conducive to attracting qualified persons. She noted that improvements in the structure, core staffing and functioning of the Department of Peace-keeping Operations were being actively pursued in order to better meet peace-keeping responsibilities. The Office's audits of peace-keeping missions had led to recommendations to change compensatory time-off policies for military observers, staff officers and civilian police. They had also led to a number of recommendations,

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including those concerning the use of aircraft, and effective budgetary control and efficient use of property. Those recommendations should be followed up.

There had been 224 audit recommendations in the area of procurement, she said. Lack of proper training and experience, of budgetary controls, and of fair and competitive bidding had been noted. The United Nations vendor roster had not been regularly updated. The Office should continue to give priority to procurement and peace-keeping missions and humanitarian activities. More than 50 per cent of all audit findings had shown weaknesses in the internal system of control. Norway welcomed the intention of the Office to establish control goals for different types of United Nations activities, and she endorsed its recommendation that a formal adoption of a set of internal control standards for the United Nations be undertaken.

JOHN O'HARA (Malaysia) said the establishment of an effective internal control system was a managerial responsibility that should not be left to the oversight Office only. Programme managers should accept criticisms and be ready to apply accountability criteria when addressing specific problems. They should report quarterly on the status of the implementation until a recommendation by the Office was reported as fully implemented.

He expressed regret that established procurement procedures were not followed in tendering exercises for the pilot project on international contractual personnel in UNPROFOR. Overpayment for insurance had been detected. Although some $200,000 had been recovered, some $300,000 was pending. In another case, an audit in Somalia had shown that some $369,000 had been paid to a contractor for services not rendered. Those responsible for such acts should be brought to book. Deficiencies on procurement procedures continued to be reported in all phases of the process. They included the abuse of emergency purchases, lack of fair and competitive bidding and an outdated vendor roster. Such deficiencies should be addressed urgently. The oversight Office, the Joint Inspection Unit (JIU) and the Board of Auditors should work closely together to ensure maximum efficiency in discharging their oversight duties. "Instead of being seen as an archaic organization with lax financial rules and regulation[s], the United Nations should become the industry leader in how an intergovernmental body should manage effectively its financial reserves." At the same time, prudent financial management should not be confused with the Member States' duty to pay their dues on time.

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