FIFTH COMMITTEE HEARS CALL FOR MECHANISM TO RECOVER STOLEN UN FUNDS

Press Release
GA/AB/3115

FIFTH COMMITTEE HEARS CALL FOR MECHANISM TO RECOVER STOLEN UN FUNDS

The Secretary-General should be authorized to create a mechanism, in cooperation with Member States, to retrieve more than $3 million stolen from the United Nations through fraud in 1994-1995 or to confiscate properties bought with that money, the Fifth Committee (Administrative and Budgetary) was told this afternoon.

The Committee was discussing reports of the Board of Auditors, Office of Internal Oversight Services and programmes of the proposed medium-term plan.

Calling for the mechanism to address fraud as he spoke on the Board of Auditors' reports, Ghana's representative said that the 148 cases of fraud and presumptive fraud discovered from 1994 to 1995 impugned United Nations credibility. The Secretary-General's hands should be strengthened to deal with embezzlement and mismanagement, he added.

The representative of Pakistan said the recovery of only $612,000 from what had been lost to fraud and presumptive fraud was a "laughable percentage of recovery". A transparent and effective system of accountability should be established to avoid incidents of fraud. He also said it would not be in the United Nations interest to extend the present term of office of the Board of Auditors. To do so would not be in keeping with the principle of rotation and would adversely affect the Board's efficiency and effectiveness.

The representatives of Japan and Norway also spoke on the Board of Auditors' reports.

As the only speaker on the reports of the Office of Internal Oversight Services this afternoon, the representative of Ireland, speaking for the European Union and associated States, said that coordination between the Office, the Board of Auditors and the Joint Inspection Unit (JIU) should be improved to avoid duplication. However, a clear distinction should be maintained between internal and external oversight.

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As the Committee continued discussing programmes of the proposed medium- term plan for the period 1998-2001, the representative of Ethiopia, speaking on programme 6 (Africa: new agenda for development), said the medium-term plan should place sufficient emphasis on the United Nations New Agenda for the Development of Africa in the 1990s which was a political compact between that continent and the international community in efforts to place the region on the path to development.

The representative of Indonesia said the efforts of the African countries in implementing the Agenda over the past few years were highly commendable and should inspire the international community to enhance its support for promoting the New Agenda. Much still had to be done by the international community to contribute to revitalizing and reinvigorating the New Agenda.

Statements on the proposed medium-term plan were also made by the representatives of Mexico, Jamaica, Australia, Cuba, Norway, United States and Haiti.

The Committee will meet again on Tuesday, 19 November, to continue discussing the reports of the Board of Auditors and the administrative and budgetary aspects of the financing of peace-keeping operations. It is also scheduled to begin considering administrative and budgetary coordination of the United Nations with the specialized agencies and the International Atomic Energy Agency (IAEA).

Committee Work Programme

The Fifth Committee (Administrative and Budgetary) met this afternoon to continue discussing various programmes in the proposed medium-term plan for 1998-2001 and the reports of the Board of Auditors and the Office of Internal Oversight Services.

Statements on Reports of Board of Auditors

FUMIAKI TOYA (Japan) said that the Board of Auditors had made 40 recommendations on the activities carried out in relation to the regular budget. He drew attention, regarding procurements, to the fact that a high number of contracts had been awarded on ex post facto bases. Also, about 48 per cent of the suppliers came from one Member State and a further 13 per cent were from a second. A similar trend was found in relation to the use of consultants, with a mere 12 developed countries producing nearly 80 per cent of the consultants engaged by Headquarters, and four developed nations accounting for 47 per cent of all contracts entered by the Department for Development Support and Management Services. Efforts should be made to rectify the situation. The Board should engage in closer cooperation with the Office of Internal Oversight Services and the Secretariat should strengthen internal audit and programme planning.

Regarding audits of the peace-keeping operations, he said that the Secretariat should elaborate the problems it faced in implementing the recommendations of the Board. Also of interest was the Board's finding that a doubtful receivable amount of $175.5 million had been included in the assessed contributions expected of some $1.93 billion. He agreed with the Board that, while arrears should not be cancelled, the Secretariat should continue to keep the matter under active consideration in order to find a solution.

The representative said that proper consideration should be given to difficult circumstances and time pressures under which the United Nations High Commissioner for Refugees (UNHCR) had to operate. He welcomed the initiatives the UNHCR had taken to improve how it chose implementing partners. But the matter should be studied further. The United Nations University should train young scholars from developing countries and lease the vacant space on the ground floor of its headquarters in Tokyo to earn more income.

TRYGGVE GJESDAL (Norway) called for a more timely processing of the Board of Auditors' reports which had been submitted by it as far back as June 1995. He fully supported the Board's recommendations and he hoped that in the future the Board would contribute even more substantially to the process of reform in the United Nations. Welcoming the increased coordination between the Board and the Oversight Office and the Joint Inspection Unit (JIU), and the improved state of audit findings, he said the follow-up of the Board's previous audit recommendations remained uneven. Systematic problems such as

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procurement still existed and self-evaluation of subprogrammes was on the decline. Related to the implementation of recommendations was the lack of full staffing of the Internal Audit and Management Division of the Office, which sent the wrong signal to both the Secretariat and Member States. Internal audit in the funds and programmes remained generally unchanged. No corrective action had been taken despite the repeated findings

In light of the increase in peace-keeping operations, he highlighted the need for a strengthening of the authority of the audit function in the field, improved asset management and strengthened liquidation capacity for the winding down of operations. Referring to the financial and management problems of those missions, he supported the recommendations of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) that the United Nations compile information on all expenses paid that should have been met by the host governments under the status-of-forces agreements. The Organization should also coordinate better with other United Nations agencies and programmes in peace-keeping operations on facilities and accommodation.

Regarding the United Nations Children's Fund (UNICEF), he supported the ACABQ's recommendations that the agency should adhere fully to its own accounting and financial guidelines. He also supported the need for that agency to follow up on internal audit findings and recommendations. On the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), he said the agency must eliminate and prevent any irregularities in its management and accounting. The Norwegian Government was cooperating closely with the Commissioner General and his staff on those matters and was confident that the UNRWA was doing its best to address those issues.

Regarding the UNHCR, he welcomed the auditing of implementing partners and supported recommendations on improving the administration of that Office's voluntary funds. He emphasized the need to develop a function within the UNHCR that was responsible for the entire supply chain which would be based on needs assessment and the overall stock situation, and which would take account of procurement, transport, warehousing and distribution.

JACK WILMOT (Ghana) said that the qualified opinion on the financial statements of six organizations -- peace-keeping operations taken together, the United Nations Development Programme (UNDP), the United Nations Population Fund (UNFPA), the United Nations International Drug Control Programme, the United Nations Environment Programme (UNEP) and the United Nations Habitat and Human Settlements Foundation -- was a serious indictment of how those bodies operated. For instance, the amount paid by the UNDP to an architect had been increased without the approval of the Committee on Contracts.

He deplored such breaches and called on the Board to follow up on its recommendations and report to the General Assembly. The UNICEF, too, should review how it handled accounting for cash assistance to governments to enhance

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accountability. Technical cooperation agreements reached by various United Nations organizations should include provisions for strengthening the capacity of governments to deal with audit issues and the monitoring of projects. He agreed with the ACABQ that the process of selecting, implementing and executing partners, either non-governmental organizations or government agencies, should be improved.

Turning to procurements, he called for further study of internal control measures to make them more efficient. More should be done to ensure compliance with procedures of international procurement, since weak controls led to losses for the United Nations. The bodies in the United Nations system should prepare procurement manuals in order to consolidate orders and gain from economies of scale and ensure competitiveness in procurements. They should avoid making piecemeal purchases of commonly used goods.

Regarding the liquidation of peace-keeping operations, he said that the transfer of assets from ending missions to ongoing operations without thorough assessments of the needs of the receiving missions was a waste of resources. Delays and lack of well-defined procedures for liquidating missions had cost Member States millions of dollars. The Secretariat should, therefore, ensure that peace-keeping missions were liquidated quickly and within specific time- frames.

He regretted the high incidence of fraud and presumptive fraud in 148 cases, involving the sum of some $3.2 million in 1994 to 1995, with only $612,544 recovered. Such rampant embezzlement and mismanagement impugned United Nations credibility. The hands of the Secretary-General should be strengthened to deal with such adverse findings. He should be enabled to form a mechanism, in cooperation with Member States, to retrieve the amounts stolen or to confiscate properties bought with them. The Secretary-General should be asked to provide the results of cases under investigation. Consultants should be hired on a wider geographical basis and the selection of sole candidates discouraged.

AHMAD KAMAL (Pakistan) said the Board of Auditors had done a commendable job in carrying out its responsibilities to point out financial and managerial irregularities and to suggest corrective action. In the light of the difficulties faced by the ACABQ in compiling its comments on the Board's report, the Secretariat should improve its efficiency. The excessive and irregular expenditures incurred by some United Nations bodies were cause for deep concern. The Board should clearly indicate the recommendations that had not been implemented and point out with greater precision malpractice and violations of rules and regulations. The audit reports had not been given due attention so far. There was also a compelling need for significant improvement in the procedures for handling the Board's recommendations.

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On the issue of consultants, he was concerned about the fact that Assembly resolutions and provisions of the Charter regarding equitable geographical distribution had not been taken into account in the hiring of consultants. The matter would have to be kept under closer review by the Fifth Committee. It would definitely be kept under review by his delegation, he stressed. On the award of contracts, he noted that a large number of contracts had been regularized by the Headquarters Committee on Contracts on an ex post facto or partial ex post facto basis. In some cases, the procedures had not been followed by programme managers and the Organization had to suffer heavy losses

He hoped that the Board's recommendations on the following would be given serious consideration by the Secretariat: budgetary control and budget performance reporting; internal oversight; procurement administration; liquidation of peace-keeping operations; and the establishment of time-frames by the Internal Audit Committee for the implementation of audit recommendations, among others.

The recovery of just over $612,000 out of millions of dollars lost in fraud and presumptive fraud was a "laughable percentage of recovery", he continued. A transparent and effective system of accountability should be established. Regarding the extension of the term of office of the Board of Auditors, he said that in keeping with the principle of rotation and for the sake of efficiency and effectiveness, it would not be in the Organization's interest to extend the Board's present term of office.

MICHAEL HOEY (Ireland), speaking for the European Union and also for Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Lithuania, Malta, Poland, Slovakia, Norway and Liechtenstein, said that the Secretariat should carry out further efforts to adopt a set of internal control standards. Failure to do so would only be seen as a lack of commitment to provide for effective internal control procedures. He welcomed the $18.7 million savings that the Oversight Office had been able to recommend. He was concerned about the Office's lack of resources. The European Union had strongly supported the creation of the Lessons Learned Unit. Given the high costs of peace-keeping operations, the maintenance of the Organization's memory arising from the experience of those involved in all stages of missions should be a fundamental requirement.

Turning to the Office's review of the management structure of the civilian component of the United Nations Peace Forces in the former Yugoslavia (UNPF), he said that there had been some lack of organizational control and deficiencies in management. The inaccurate assessment of contingent-owned equipment, for instance, fell short of the ideal. The recommendations made by the Office in its report on the UNPF and endorsed by the General Assembly should be taken into consideration by the Secretariat in the future planning of peace-keeping missions.

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The representative said that procurement reforms should be taken further and a transparent policy on procurement put into practice throughout the Organization. The decision of the Office to concentrate on the problems of setting up new bodies would enable it to warn the United Nations of poor practices before they became accepted norms in the new organs.

Regarding the cooperation between the Office, the Board of Auditors and the JIU, he said that duplication should be avoided and a clear distinction kept between internal and external oversight. Even though the Office had submitted its report on the United Nations access control system, an examination of the system was included in the 1996-1997 programme of the JIU. That, along with the disappointing JIU observations on the work of the Office, reinforced the view that cooperation among the oversight bodies left something to be desired. Member States should consider the Office's reports on general administration, the United Nations Postal Administration, the access control system and the Gift Centre.

Statements on Medium-Term Plan

MARTHA PENA (Mexico) said the Secretariat should have introduced the revised version of programme 11 (Human settlements) in the same way it had introduced revised programme 9 (Trade and development). Even though she was waiting for instructions from her capital, she generally found the programme acceptable. She also reserved the right to propose amendments, should the need arise.

SHEILA SEALY MONTEITH (Jamaica) said that the mandates in programme 11 had been derived from those from the global conferences, such as this year's United Nations Conference on Human Settlements (Habitat II). The role of the Commission and the Centre for Human Settlements (Habitat) in the field of human settlements should be enhanced.

MILES ARMITAGE (Australia) expressed satisfaction with how programme 4 (Legal affairs) had been drafted and with the comments of the Committee for Programme and Coordination (CPC). Regarding subprogramme 4.6 -- custody, registration and publication of treaties, he said his delegation was distributing a draft resolution on the treaty section of the United Nations. The draft would try to have United Nations treaty series placed on the Internet. It would also endorse the intention of the Secretariat to collect some payments from commercial users of the Internet access to the treaty series. But, Member States, non-governmental organizations, academic institutions and other bodes would be granted such access free of charge.

DULCE MARIA BUERGO RODRIGUEZ (Cuba) said that programme 11 (Human settlements) supported the offices dealing with human settlements. She expressed full support for programme 11, as revised.

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WOLDE-HAWARIAT G. SELASSIE (Ethiopia) supported the statements on programme 6 (Africa: new agenda for development) made by the representative of Costa Rica, on behalf of the "Group of 77" developing countries and China, and by Cameroon, for the African Group. The United Nations New Agenda for the Development of Africa in the 1990s was a political compact between that continent and the international community in efforts to place the region on the path to development. The medium-term plan should place sufficient emphasis on it. More background information should have been provided in the narrative on the programme.

The organizations of the United Nations system should play important parts in implementing and following up on the New Agenda, he said. United Nations institutions with roles in such efforts, such as the Economic Commission for Africa (ECA), should be given the financial, personnel and logistics resources they required to carry out their tasks. Activities should be geared, among others things, towards the mobilization of resources and the resolution of the debt problems. He endorsed programme 6 as proposed by the Secretary-General and amended by the CPC.

JORN GUTTEROD (Norway), speaking on programme 16 (Economic development in Europe), said his country had been involved in the reform process in the Economic Commission for Europe (ECE). A reform package had been presented in October. His Government was satisfied that the reform had focused on the new work programme in which environmental issues were of particular importance. The number of programme elements had been reduced and cuts had been made in the budget. Expressing appreciation of the way the ECE staff and management had responded to the reforms, he said he believed that the body had already taken its share of the budgetary cut-backs that had been imposed on the United Nations system.

THOMAS REPASCH (United States), speaking on programme 11 (Human settlements), said he would have preferred a full introduction of the revised programme. Welcoming the revision, he said it was a good programme, the narrative of which reflected the agreements reached at the Habitat II Conference. He was satisfied with it.

JOSEPH INNOCENT (Haiti), also speaking on programme 11, expressed full support for the United Nations Centre for Human Settlements which was important for the implementation of the agreements reached at Habitat II.

PRAYONO ATIYANTO (Indonesia), speaking on programme 6 (Africa: new agenda for development), said it was important to take account of the mid-term review of the New Agenda for Africa. The efforts of the African countries in implementing the New Agenda over the past few years were highly commendable and should inspire the international community to enhance its support for promoting it. Despite the untiring efforts of the African countries, the New Agenda's implementation had fallen short of expectations. Much still had to

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be done by the international community. Shortcomings must be vigorously addressed if the implementation process of the New Agenda was to be revitalized and reinvigorated.

The Assembly's task during this session was to forge an agreement that the recommendations of the mid-term review should be integrated into the Agenda for implementation in the second half of the decade, he said. Among the support that should be given to Africa should be an increase in the level of assistance; more investment in areas such as venture capital initiatives, institutional building and human resource development. The debt problem should be redressed, he said, calling for a comprehensive approach to be devised to deal with that. He reiterated his strong support for programme 6.

Ms. BUERGO RODRIGUEZ (Cuba) said she appreciated the information provided by the Secretariat on a draft calendar of evaluations by the Oversight Office. She would take up a related matter in the informal consultations.

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