PRESS BRIEFING BY UNDER-SECRETARY-GENERAL OF ADMINISTRATION AND MANAGEMENT
Press Briefing
PRESS BRIEFING BY UNDER-SECRETARY-GENERAL OF ADMINISTRATION AND MANAGEMENT
19960819
FOR INFORMATION OF UNITED NATIONS SECRETARIAT ONLY
Under-Secretary-General for Administration and Management Joseph Connor, in briefing correspondents at a press briefing at Headquarters Friday, said the outline of the Organization's 1998-1999 budget was the first, preliminary, indication of the resources the Secretary-General would need in 1998-1999 to carry out the programmes that Member States had mandated. The estimate would be the basis for preparing the full programme budget for 1998-1999 which would be submitted in the spring of 1997. (The related document -- Proposed Programme Budget Outline for the Biennium 1998-1999 (document A/51/289) was also released Friday.)
Giving an overview of the budget, Mr. Connor reminded correspondents that the General Assembly had provided $2,608.3 million for the current biennium (1996-1997). For 1998-1999, the Secretary-General estimates -- before allowing for inflation and foreign currency exchange fluctuations -- that he would require resources of $2,429.4 million, a decrease of $178.9 million or 6.9 per cent.
Explaining the decrease in overall resources "in terms of our prime resource" -- the number of staff members who work in the Secretariat -- Mr. Connor said the Assembly had approved a staffing level of 10,021 posts, as at 1 January 1996. During the course of the 1996-1997 biennium the Organization had reduced, and would continue to reduce, staffing levels. One thousand posts would be vacated and kept unoccupied in 1996-1997. To date, some 900 posts, of the 10,021 authorized, were now vacant -- unoccupied. For 1998- 1999, it was estimated that, on average, 8,500 posts would be occupied -- a 15 per cent reduction since 1 January. That staffing level represented a 30 per cent reduction since 1985.
The resources appropriated for 1996-1997, $2,608.3 million, and those needed for appropriation in 1998-1999, $2,429.4 million, were stated at 1996- 1997 price levels, Mr. Connor said. No provision had been made to reflect 1998-1999 price levels in that biennium's budget amount. The purpose of reflecting both the 1996-1997 and the 1998-1999 biennium budgets at 1996-1997 price levels was to show if real resources were being increased or decreased. The figures show that for 1998-1999, the resources were being diminished.
The decrease had occurred for a number of reasons, Mr. Connor said. Some one-time costs of $8 million that had been appropriated for 1996-1997 would not be needed in 1998-1999. In the 1998-1999 budget outline, an additional $7 million had been included to cover the full costs of posts
established during 1996-1997, but which were not occupied for the full two years of that biennium.
During the 1998-1999 biennium, the Secretary-General intended to continue to intensify efforts to increase efficiency and productivity throughout the Secretariat, Mr. Connor continued
Mr. Connor said some $204.7 million of anticipated gains in efficiency and productivity as well as other cost reductions had been built into the 1998-1999 budget outline. Streamlined structures and work processes had resulted in reductions and cost containments in the programme budget in 1996- 1997. More would follow in 1998-1999. "The process of identifying productivity improvements and efficiency gains has become a way of life in the Secretariat; the process is becoming institutionalized."
Productivity improvements meant producing the same amount of output with fewer staff members, Mr. Connor continued. Instituting efficiency gains meant re-engineering, simplifying and speeding up the Organization's principal administrative processes -- personnel, finance, travel, procurement. A progress report on this subject and the workings of the Secretary-General's Efficiency Board was being prepared for distribution in September. A briefing for Permanent Representatives on the matter had been scheduled for September.
Not all the changes in the 1998-1999 budget outline could be attributed to improved efficiency, Mr. Connor continued. There had been some cost cuts. At the end of 1997, all the costs related to the development and implementation costs of the Integrated Management Information System (IMIS) would be paid. It would take a number of years to extend it to all parts of the United Nations system. However, at Headquarters, expenses would now be limited to the maintenance of the system. It was now being extended to other parts of the United Nations system, such as the United Nations Children's Fund (UNICEF), the United Nations High Commissioner for Refugees (UNHCR) and the United Nations Development Programme (UNDP) in order that those organizations would not have to commit the same amounts that Headquarters had spent in developing the system -- $70 million over several years. An amount that was much cheaper than it would have cost in the private sector.
The 1998-1999 budget outline also included $70 million, which was the Secretary-General's best estimate of the added amount needed to fully provide for possible mandates relating to special missions. No such provision had been made in the 1996-1997 programme budget. In 1996, to date, the Organization had absorbed such unfunded mandates principally related to Haiti and Guatemala, within existing resources. Therefore, for the next biennium, provision had been made for the likelihood of special mission extensions or in anticipation of new ones.
In addition, an accounting change -- amounting to $43.2 million -- had been made in preparing the budget outline for 1998-1999, he said. In the
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1996-1997 budget, and earlier bienniums, the cost of some activities -- such as the Joint Inspection Unit (JIU) and the International Civil Service Commission (ICSC), or services provided to all common system entities at the Vienna International Centre -- had been included for budget purposes at 100 per cent of the total cost of those services. For 1998-1999, only the United Nations portion of the costs of such jointly financed activities and services had been included in the United Nations budget as appropriations. Mr. Connor emphasized that it was merely an accounting change which had no effect on the assessment base, which combined both the appropriations section and the income sections of the programme budget for assessment purposes.
When the preliminary estimate of $2,429 was converted into 1998-1999 amounts, by taking inflation into account, it was estimated that this would add $129.6 million to the costs -- about 5 to 5.5 per cent over the two year period. The recosted estimate of preliminary requirements for 1998-1999 would thus increase to $2,559 million. It was not yet possible to include an estimate for foreign currency movements applicable to 1998-1999 since there was no reliable way to predict, at this time, the value of the Swiss franc or the Austrian schilling or other relevant currencies compared to the United States dollar.
The preliminary estimate for 1998-1999, of $2,559 million, at 1998-1999 rates, would mean a reduction of $49.3 million in resource requirements, Mr. Connor continued. Of that reduction, $43.2 million related to the accounting change. Additionally, if the Assembly decided to maintain the 1996-1997 budget limit of $2,608.3 million in 1998-1999, $6 million is available for a contingency fund of 0.25 per cent for the biennium 1998-1999. A contingency fund set at that level was in line with drawdowns now being experienced in the first year of the current biennium.
Mr. Connor then focused on the reductions proposed in the 1998-1999 budget outline. The overall reduction in real resources requested was $178.9 million, a decrease of 6.9 per cent. That overall picture, however, fell unevenly on various parts of the budget. As an example, the Department of Political Affairs showed increased resources -- up by $61.8 million or 37.9 per cent -- principally because of the proposal to provide $70 million up front for special missions. For conference services, there would be a decrease of $51.3 million or 11 per cent of those resources. Administration, including the maintenance and cost of building facilities, had also been reduced in real resources by $60.5 million or 13 per cent. Staff assessment would decrease by $58.7 million, down 16.5 per cent, as a result of fewer staff.
The smallest percentage decrease -- 4.4 per cent -- was in the area of development, including both regional and international cooperation, he said. Emphasizing that those figures reflected real resource changes, he said that when the resources set forth in real terms were recosted to include inflation
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anticipated in 1998-1999, many sections of the budget would have increased appropriations.
Summarizing the 1998-1999 budget outline, Mr. Connor said that real resources would decrease by $179 million or 6.9 per cent compared to the amount appropriated for 1996-1997. Staff levels would decrease by 1,500 posts since the beginning of 1996, a 15 per cent decrease. The decrease in real resources was sufficient to cover likely inflation in 1998-1999 and still maintain a budget amount for 1998-1999 of $2,559 million. The budget outline amount also absorbed the cost of new special political missions for 1998-1999 with enough margin to provide for a modest contingency fund.
Mr. Connor concluded that, given the need to be as cost conscious as possible, the Secretary-General, in proposing his budget outline for 1998- 1999, had been reasonably confident that the objectives of the programmes included in the proposed medium-term plan could be pursued in 1998-1999 within the overall level of resources indicated in the proposed outline. That was the task the Secretary-General and his programme managers are committed to do.
A correspondent asked if the Organization's work programme were to be pared down in the way that the Assembly wanted it to be done, how would it affect the Organization's efficiency and financial savings. Mr. Connor said that the Secretary-General, through his programme managers, was focusing on managerial efficiency and improvement -- one phase of the reform process. What he was not focusing on was intergovernmental reform -- issues such as the number of meetings and the number of documents requested by Member States. If it were possible to curb that appetite, the Secretariat would have a much easier time living within a stated budget. The Secretariat had responded to Member States' requests to live within a budget cap. If a cap was put on requests, it would be easier to live within the resources cap. "We would welcome a pruning down of requests." To illustrate the current trend, in the last two years, the number of meetings increased from 4,500 to 7,000. "Not one of those meetings was called by the Secretariat. They were called by Member States." Even though the Organization existed to serve Member States, "some focusing" was necessary, on both managerial reform as well as intergovernmental reform. The latter was currently being considered by a high-level group of Member States whose report was expected during the Assembly's fifty-first session.
Asked why there had been a 37.9 per cent increase in Political Affairs and if that meant that those activities would flourish at the expense of others, Mr. Connor said the term political affairs included special missions. That was the category that was historically used. A special mission, such as human rights monitoring in Guatemala, was an assessed activity which happened to be related to human rights. Of the $70 million allocated for special missions, if $50 million were eventually allocated to specific human rights monitoring, the amount earmarked would then be placed in another budget line. However, Secretariat officials had no idea at this time of how the $70 million
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would be used. They were prudent in including a provision for such activities in the budget. Once specific requests were made, the relevant budget lines would be adjusted. While the allocation would be referred to as special missions, it would eventually be expended on different activities.
When asked about budget allocations proposed for the Department of Public Information (DPI)'s budget, Mr. Connor said it was projected to decrease by $6.5 million or 4.9 per cent from the appropriation for 1996-1997.
Asked for clarification on staffing levels, Mr. Connor said staff reductions would continue to primarily be generated through attrition during the remaining 16 months of the current biennium. Those reductions would add another 100 to the 900 posts already vacated. The total number of vacant posts were being controlled while concurrently reallocations within budget categories were being effected to safeguard the delivery of mandated programmes.
He went on to say that the Organization was currently undergoing the redeployment exercise which was a good exercise since it tried to assume that staff in need of placement would fill posts crucial for the implementation of mandated programme activities. The target vacancy of 1,000 posts would be achieved at the end of 1997. At that time, the Secretariat's management would know which posts should remain vacant and would determine which posts should be suppressed. Following that process, another 6.4 per cent vacancy rate, representing approximately another 500 posts, would be created for the next biennium, 1998-1999.
He explained further, that at the end of 1997, the Organization would have 9,000 posts filled and 1,000 vacant. In the context of the new budget these 1000 posts would be suppressed. Another 500 vacancies would then be established for the next biennium. Based on that exercise, 8,500 people would then be working in the Organization. "At the end of 1999, we will suppress those 500 posts." That was the downsizing process. The Secretariat had been asked to create vacancies, not to eliminate posts, in the budget reduction that had been voted by the Assembly last December. As a managerial tool, the vacancy approach had made it possible for the Secretary-General to quickly downsize. "It worked." For the last two months, the Organization had been functioning with about 900 vacancies of the legislated 10,000 posts.
A correspondent asked if the vacancies existed in all the United Nations centres -- New York, Geneva and Vienna, what was the cost of the buyout and would buyouts be offered again in the future. Mr. Connor provided examples of actual vacancy rates in a number of departments. In DPI, it was 9.5 per cent; in one section of the Department of Administration and Management, it was 8.6 per cent; and in the Legal Office, it was 9.0 per cent. Those clearly identified posts were now vacant and had been frozen. They could not be occupied.
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Regarding the buyout, he said the majority of the vacancies had been created by voluntary attrition. The redeployment stage was designed to meet budget objectives where a targeted number of vacancies was not reached. If posts could not be found for those staff members who were part of the redeployment process they would have to leave the Organization. The process was a balancing act but the Organization intended to hold to the total number while reallocating personnel within the Organization to achieve a more uniform vacancy rate.
The Organization had charged $15 million for separation payments to the 1996 budget, he continued. Because of the fact that the voluntary termination programme had already been in effect in the fall of 1995, the management had been able to act quickly in response to the Assembly's mandate. At that time, several hundred staff members had already volunteered to leave. Their requests had been accepted and contracts had been signed to terminate them but the "payouts" had to be deferred until January 1996. In 1995, the intention had been to fill the posts but they were no longer filled and the number was included as part of the targeted 6.4 per cent mandated vacancy rate. An amount of $25 million had also been charged to the 1995 budget without causing any overrun.
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