PRESS BRIEFING BY UNDER-SECRETARY-GENERAL FOR ADMINISTRATION AND MANAGEMENT
Press Briefing
PRESS BRIEFING BY UNDER-SECRETARY-GENERAL FOR ADMINISTRATION AND MANAGEMENT
19960725
FOR INFORMATION OF UNITED NATIONS SECRETARIAT ONLY
At a Headquarters press briefing yesterday afternoon, Under-Secretary- General for Administration and Management Joseph E. Connor provided correspondents with updated forecasts on the United Nations financial situation. Recalling that April forecasts had indicated that funds in the United Nations regular budget would be exhausted at the end of that month, he said that, at that time, he had expected the negative situation to turn around as of 30 June. The prospects had been for improvements in the overall cash position by then. That had been due to the fact that the Secretariat was anticipating funds from Germany and Japan, which would complete their 1996 regular budget payments. The United Nations had been aware that the United States Congress had passed laws to provide increased funding, and the United Nations had been told to expect a June payment of most of the increased sums, with smaller amounts to be paid out shortly afterwards. As a result, the regular budget's "zero cash position" had been expected to be short-lived.
"The good news did not happen", he said, adding that actual cash receipts by 30 June had fallen short of expectations. While the sums of $49 million and $128 million expected from Germany and Japan, respectively, had been received, the $165 million expected from the United States -- $125 million by 30 June and $40 million in July -- had not been received. Rather, that country had paid $10 million in May and $68 million in July, with a further $7 million expected this month. Therefore, about $85 million was expected from the United States by the end of July -- some $80 million less than had been projected earlier. The receipt of the outstanding sum would depend on the United States Secretary of State certifying to the United States Congress that the United Nations had not taken any action that would make it exceed its no-growth 1996-1997 budget. The certification had not been made, and the amount and timing of the receipt of any of the $80 million depended on the outcome of the process.
Delays and uncertainties in payments, Mr. Connor added, had emptied the United Nations regular budget treasury as of 30 June, forcing the Organization to borrow peace-keeping funds to meet regular budget needs. While the United States payment of $68 million in July had alleviated the situation, the regular budget will be "at zero or below zero regular budget cash" by 31 July. The situation would persist until the end of the year, even if the $80 million was paid and the United States paid some of the cash forecast in relation to its 1996 assessments.
There were some positive developments, however, Mr. Connor continued. Eighty Member States had fully paid their regular budget dues by 24 July,
compared to 57 at the same date a year ago. Despite that, some $830 million was owed to the regular budget, with the United States accounting for about 74 per cent of the amount. The United Nations was anticipated to end the year with a $287 million negative cash position in its regular budget. The forecast excluded the $80 million subject to certification, but included $113 million expected from the United States after 1 October, which marked the beginning of that country's new financial year. That country had confirmed that payments after 1 October are expected to at least "parallel" last year's. Dues expected from other large contributors are based on what they had confirmed to the Secretariat, which then estimated what it anticipated from other Member States.
Contrary to the April forecast that the United Nations would end the year with a negative regular budget cash balance of $198 million, Mr. Connor said that the sum of $287 million seemed more likely, mostly due to the $80 million related to certification.
Turning to the resources for peace-keeping operations, the Under- Secretary-General said that it was very difficult to estimate the inflows and outflows of cash for such missions. That was because they were irregular in timing and assessments, and also due to the fact that the predictability of payments was much more volatile than that for the regular budget. As a result of the decisions of the last resumed session of the General Assembly, there had been significant revisions in peace-keeping cash balances forecast for the end of the year. While a cash balance of $586 million had been forecast last April for the end of the year, it was now anticipated that the amount would be $837 million. The changes in forecast were due to the fact that, in approving new peace-keeping assessments from mid-1996, the Assembly had not always reduced the assessments by the amount of credits -- or unspent sums -- available from the missions' preceding mandates. Credits, he explained, arose when assessments were underspent, and they were usually applied to reduce assessments for subsequent mandate periods. But in a change in practice, the Assembly did not use available credits from past mandates to reduce the amount of new assessments. However, those credits -- such as about $220 million for the United Nations Peace Forces in the former Yugoslavia (UNPF) and $20 million for the United Nations Assistance Mission for Rwanda (UNAMIR) -- could be applied in the future by Member States. The General Assembly decisions not to apply credits to peace-keeping assessments had raised estimated cash inflow by $193 million.
Planned payments in 1996 to Member States for troops and equipment had been increased to $350 million, $50 million more than that forecast in April, according to Mr. Connor. Of that, $215 million had been disbursed. The Secretariat hoped to make a special year-end payment of an additional $275 million for troops and equipment. The added payment depended on the full receipt by then of total anticipated 1996 contributions of $400 million from the Russian Federation, of which $180 million had been received. Even with the additional payments to Member States, total debt to Member States for
Connor Briefing - 3 - 25 July 1996
troops and equipment would be $675 million by the end of 1996. The April forecast was $725 million. The combined cash balance for the regular and peace-keeping budgets was now forecast to be $550 million at the end of the year, up from the $388 million forecast earlier. That showed an improved overall cash flow position but a worsening regular budget situation, with a persistent, negative cash flow in many months of the year. The situation had been made tolerable by the availability of peace-keeping funds which could be borrowed. However, the levels of peace-keeping assessments were diminishing; moreover, the level of cash in peace-keeping accounts would drop suddenly when the Assembly decides to apply credits to future peace-keeping or other assessments. Member States should pay their dues to reduce the total outstanding assessments of some $2.925 billion as of 15 July.
Turning to the 1996-1997 budget, the Under-Secretary-General said that vigorous efforts were being made to keep the United Nations within the approved $2.6 billion. To do so, real costs had been cut below the 1994-1995 level by $252 million. About $98 million of reductions had been included in the 1996-1997 proposed budget, and further reductions of $140 million had been identified and reported to the Assembly in March. A report on $14 million more savings would be submitted to the Assembly in September. The number of United Nations posts had been cut by 1,000 to achieve those savings. The total number of regular budget posts was down to 9,100, which would drop further by the end of the year. Efficiency reviews to re-engineer work processes in the various departments had helped to achieve the downsizing while carrying out all assignments.
In addition, the United Nations was being asked to absorb, within the budget level of $2.6 billion, some $35 million in new unbudgeted mandates.
There were no indications that the United Nations was overspending its budget despite the new mandates and the added costs of staff separations, Mr. Connor said. The Secretariat had been helped by the strengthening of the United States dollar in relation to the Swiss franc, because the United Nations paid a lot of its expenses in Swiss currency. A performance report to be submitted in November would provide more details on the effects of currency rate fluctuations and the results of efficiency reviews on cost savings. "The Secretary-General is committed to living within the present biennial appropriations", he emphasized.
In response to a question as to which were the main unfunded mandates, Under-Secretary-General Connor noted that the two main ones were the United Nations Human Rights Verification Mission in Guatemala (MINUGUA) and the International Civilian Mission to Haiti (MICIVIH). He added that some other special missions or representatives were, from time to time, sent to various parts of the world. Since they were unfunded, money had to be found for them in the existing budget.
Connor Briefing - 4 - 25 July 1996
Asked whether the certification by the United States Secretary of State would depend on the actions of the Under-Secretary-General or of the Assembly, Mr. Connor said that the Assembly had so far taken no action to raise the 1996-1997 appropriations. The certification matter was an issue to be dealt with by the United States, not the United Nations. However, the United States Permanent Mission to the United Nations had informed the Secretariat that the certification had not taken place.
Pressed to explain how the Secretariat would absorb unfunded mandates without additional appropriations, he said that they would be carried out within existing resources, as decided by the Assembly. The Under-Secretary- General further responded that the Secretary-General did not have the authority to spend more than the appropriated $2.6 billion. The Secretariat would welcome Member States' suggestions on the curtailment of activities they did not regard as priorities to help in that regard. At the same time, an efficiency drive was producing a credible list of re-engineering achievements that would also help. The first phase of the efficiency drive would be reported around mid-September.
In response to a question as to whether the United States Mission had asked the Secretariat to make specific cuts in the Department of Public Information, he said that the Secretariat had received suggestions from the United States on how to do that and had looked at all of them. The Secretariat was intensifying its review of efficiency while, at the same time, looking at what it had to deliver to Member States for each mandate. The Secretariat had to deliver its mandates.
On a question as to whether his office had any evidence of the United States alleged diversion of funds towards the re-election of Secretary-General Boutros Boutros-Ghali, Mr. Connor said, "I don't know of any activities that are in that character. Perhaps, the United States would wish to indicate what it had identified."
Asked what would be done on a report on how the Assembly-mandated cost reductions would be achieved, the Under-Secretary-General said that the March report was a plan showing what services would be affected by the intended cuts and how those effects would be mitigated by efficiency gains. Within the short time it had had to prepare that report, the Secretariat had concluded that the United Nations could absorb cost cuts through two mechanisms -- impacts and efficiency gains -- of some $140 million. Since then, departments had thoroughly reviewed their operations and trained hundreds of middle- management staff on how to re-engineer and simplify processes. The Secretariat would, this month, lock in at least $154 million in mandated savings and prepare a final report in September for quick action by the Advisory Committee on Administrative and Budgetary Questions (ACABQ) and the Fifth Committee (Administrative and Budgetary). Most of the ways in which the $154 million cost cuts could be achieved were now available to the Secretary- General, with many of them already implemented. "The important thing to do in an organization when you are faced with cost reductions is, `Get it done!'"
In response to a question as to whether, as an American insider, he found the United Nations as having a "bloated bureaucracy", Mr. Connor said that the Secretariat was improving procedures and eliminating what might be referred to as the "bureaucratic way". For instance, while it once took
Connor Briefing - 5 - 25 July 1996
11 months and 19 steps to recruit a staff member, that process had been re- engineered down to three months and seven steps. Some other opportunities had occupied his attention, one of which was the introduction of the Integrated Management Information System (IMIS), an integrated computer capability dealing with personnel and financial transactions. Innovation had produced better results than what any other governmental unit he knew of had done. Many national governments had failed to make a similar system work. The software and training on the use of the IMIS would be made available to the United Nations Children's Fund (UNICEF), the United Nations Development Programme (UNDP) and the United Nations High Commissioner for Refugees (UNHCR). The performance appraisal system had been refined and improved, and about 8,000 staff trained in the new methodology. The introduction of the Optical Disk System (ODS) was simplifying the distribution of documents to missions and capitals. There were potential areas in which greater use of technology could be made. For instance, the development of the United Nations Home Page on Internet might make the publication of the daily Journal obsolete.
Of the four items he said he personally focused on, Mr. Connor said that he devoted particular emphasis to completing the installation of the IMIS project; increasing output to Member States while reducing costs related to the regular budget; and changing the personnel system to train, evaluate and promote personnel more properly. But he had failed to improve the United Nations financial base, which remained precarious.
* *** *