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GA/AB/3167

SECRETARIAT PRACTICE OF MAINTAINING HIGHER-THAN-MANDATED VACANCY RATES TO SAVE FUNDS SHOULD BE STOPPED IMMEDIATELY, GROUP OF 77 TELLS FIFTH COMMITTEE

7 October 1997


Press Release
GA/AB/3167


SECRETARIAT PRACTICE OF MAINTAINING HIGHER-THAN-MANDATED VACANCY RATES TO SAVE FUNDS SHOULD BE STOPPED IMMEDIATELY, GROUP OF 77 TELLS FIFTH COMMITTEE

19971007 Committee Discusses Impact of Approved Savings On Mandated Activities; Concludes Debate on Peacekeeping Financing

The Secretariat should immediately stop its practice of maintaining higher-than-mandated vacancy rates to save funds, the representative of the United Republic of Tanzania said this afternoon as the Fifth Committee (Administrative and Budgetary) discussed the Secretary-General's report on the effect of $154 million in budget cuts on the Organization's work. Speaking for the "Group of 77" developing countries and China, he said such rates seriously hampered the delivery of mandates. Paraguay's representative, speaking for the Rio Group, said attempts to implement the savings had led to the neglect of the principle of multilingualism, despite specific budgetary provisions for it. The representative of Belgium, speaking for the European Union and associated States, said the manner in which mandates were implemented should become part of the debate on the proposed 1998-1999 budget.

New Zealand's representative said the report on the budget cuts indicated that the Organization's management could prioritize with efficiency, when necessary. She expressed support for the Secretariat's efforts to improve efficiency. As the Committee concluded its debate on administrative aspects of peacekeeping financing, particularly death and disability benefits, the representative of Nepal said adequate staff should be provided to process the backlog of casualty claims. The representatives of Cuba, Iran, Kenya, Japan, Algeria, United States, Australia, Mexico, Canada and Pakistan also spoke at today's meeting. The Director, Programme Planning and Budget Division of the Office of Programme Planning, Budget and Accounts, Warren Sach; the Deputy Director, Peacekeeping Financing Division of the same Office, Yeo Bock Cheng; and the Deputy Director, Field Administration and Logistics Division of the Department of Peacekeeping Operations, Steiner Bjornsson, also briefed Member States.

The Committee is scheduled to meet again at 3 p.m., on Monday, 20 October, to take up the question of scale of assessments for sharing out the Organization's expenses.

Committee Work Programme

The Fifth Committee (Administrative and Budgetary) met this afternoon to consider aspects of the 1996-1997 regular budget. Under the agenda item, it had before it the Secretary-General's report on the impact of the $154 million savings from the $2.7 billion initially approved for the 1996-1997 budget, on the implementation of mandates.

Aspects of 1996-1997 Regular Budget

In a report on the impact of saving some $154 million from the 1996-1997 regular budget on the implementation of United Nations mandates (document A/C.5/51/53), the Secretary-General says that mandated work will be implemented, but at a level that might vary, sometimes, from that initially planned. Meanwhile, technological innovations and improved working methods have helped simplify processes, streamline procedures and eliminate excessive paperwork needs. While the Secretariat has mitigated the immediate impact of budget cuts by modifying work methods, there has been an impact on the Organization's long-term work, since the need to deal with immediate issues has diverted attention from long-term efforts to prepare for future challenges.

It was clear that cuts of $154 million could only be achieved with a significant reduction in staff costs, the Secretary-General writes. To achieve them, managers have maintained vacancy rates that were significantly higher than those budgeted for. To ensure that all mandates were carried out, the Secretariat took steps to mitigate the impact of staff reductions by using more efficient ways of work. The measures included simplifying procedures, streamlining organizational structures and redistributing tasks. Despite that, some programmes have been affected in terms of their scope or timeliness of delivery.

Generally speaking, the Secretary-General continues, the effects of budget cuts on the implementation of United Nations activities can be categorized under a few broad issues. For example, the capacity to manage and coordinate staff work effectively, to organize meetings and to conduct consultations with Member States have been stretched. That means that the Secretariat's ability to respond in a timely fashion to Member States' requests for services has also been affected. Regarding non-post items, reductions in resources have led to less travel for data collection and consultations with governments and other entities. Cuts in funds for consultants have affected the availability of additional expertise to the Secretariat in areas such as commercial law, specialized issues for inclusion in reports, development of strategies and policy options, or technological innovations. Further, because of the links between the Secretariat's offices, delays in one area have hurt the timely implementation of work in others. For

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instance, delays in submitting documents by one area have led to delays in editing, translation and reproduction by others.

While the Secretariat has mitigated the impact of the budget cuts by implementing efficiencies, he says that those efforts and reductions have often led to additional burdens on existing staff, stretching available expertise thinly. The report then reviews the impact of the implementation of the $154 million savings on the 1996-1997 budget sections.

In a relevant part of its first report on the proposed 1998-1999 budget (document A/52/7), the Advisory Committee on Administrative and Budgetary Questions (ACABQ) says that the document on the effects of the savings would not meet the need for adequate analysis. It is very general in nature and yet some of its statements should give rise to concern.

In the report on its work (document A/52/16), the Committee for Programme and Coordination (CPC) states that the delay in the presentation of the Secretary-General's report on the impact of the $154 million savings did not allow it to identify in all cases the possible effects of his proposals. It recommends that the Assembly take the report into account in discussing the proposed 1998-1999 budget.

During the CPC's discussions on the savings, according to the report, many delegations expressed concern at the discrepancy between the assurances given Member States that all mandated activities would be fully implemented and the content of the Secretary-General's report, which confirmed that the implementation of mandates faced serious problems. Several delegations said that the savings should enhance efficiency and effectiveness and not undermine them.

One delegation expressed the view that the impact of the budget cut must have been offset by the strength of the United States dollar and savings achieved by efficiency measures. The same delegation said that, while the Secretary-General's report mentioned increased workload for staff due to higher vacancy rates, there was a proposal to cut 1,182 posts. Others asked about the impact of the proposed reduction on the proposed 1998-1999 budget.

Statements on 1996-1997 Budget: Impact of Savings on Mandates

WARREN SACH, Director, Programme Planning and Budget Division, Department of Management, introduced the Secretary-General's reports on the effects of the $154 million savings on the 1996-1997 budget. The report confirmed what had been submitted in earlier documents and showed how savings had been achieved and how it affected United Nations mandates. Vacancy rates were kept higher than budgeted, to ensure that the savings that had been sought by the Assembly would be achieved. In addition, activities had been reduced and processes streamlined. At the same time, efforts had been made to

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implement all mandates, even though the constraints had affected the quality and timeliness of work.

The performance report on the budget, which would be released later in the year by the Office of Internal Oversight Services, would provide further information on, for instance, how programmes or activities were curtailed, he continued. Efforts were made, however, to reprogramme work to ensure that the essence was implemented. The speed by which changes had to be made meant that the Secretariat had to make ad hoc adjustments to cope with smaller resources, due to the cut of some $154 million. Overall, the report before the Committee summarized information by budget section.

MUSINGA TIMOTHY BANDORA (United Republic of Tanzania), speaking for the Group of 77 and China, said discrepancy existed. Member States had been assured that all mandated activities would be fully implemented at the level of resources requested. The Secretary-General's report, however, indicated that the full implementation of mandates was not possible. Nothing showed that the full implementation of programmes and mandates could be fully carried out.

He then commented on various parts of the budget sections. The Group of 77 was concerned about the negative impact of the savings on the long-term work of the Organization. The Secretariat must be equipped to fully implement all mandated programmes and activities. Noting with serious concern the use of vacancy rates that were higher than those approved by the Assembly, he said he strongly believed that the practice should stop immediately. Higher vacancy rates seriously hampered the delivery of the mandates. In that context, the Secretariat should provide precise information on the amounts underspent in view of the high vacancy rates throughout the 1996-1997 biennium.

Commenting further on some budget sections, he said he was concerned that the Department of Political Affairs' ability to address political issues and urgent security problems in, for instance, Central Africa had been highlighted by the Secretary-General's report. He regretted the cuts in the meetings of the Advisory Board on Disarmament Matters and in the number of fellowships for diplomats from developing countries in the field of disarmament. On the budget section devoted to development activities, he said he regretted the delay in or postponement of work on issues emanating from the major conferences and the reduction in the number of publications of special benefit to developing countries. Restoring those shortfalls must be a priority. He was also concerned about the postponement and cancellation of some of the work of the United Nations Centre for Human Settlements (Habitat).

Turning to the regional commissions, he said they should be empowered to fully implement their mandates. The effects of the cuts on their ability to deliver mandates must be addressed. As for public information, he regretted that the section had been severely affected by the budget cuts, as well as the

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fact that the local language versions of the United Nations publications and other services rendered by the information centres had been slashed due to lack of funds. The suspension of such publications as the United Nations Chronicle in some official languages was regrettable, as such measures would hurt the United Nations' ability to address international public opinion.

BERNARDINO HUGO SAGUIER CABALLERO (Paraguay) spoke on behalf of Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Panama, Peru, Uruguay, Venezuela, Honduras (for Central America) and Guyana (for the Caribbean).

The programme budget for the 1996-1997 biennium had represented a political compromise, he said, requesting the Secretariat to effect savings of up to $104 million, to be carried out under specific guidelines in resolution 50/214. The basic guidelines for the savings measures had been: that it should not effect full implementation of all mandated activities, and that savings proposals should be approved by the Assembly. The document before the Committee was an attempt to provide the information requested, but it was general, not submitted in budget format and did not include all budget sections. More questions than answers were to be found in the report.

Noting that more than 75 per cent of the Organization's finances were related to personnel costs, he expressed concern at what seemed a deliberate attempt to keep the vacancy rate above that approved by the Assembly. He asked for further clarification on the impact of the value of the United States dollar vis-à-vis other currencies on the budget of the Organization. Given the importance of implementing mandates, he wondered why the results of positive exchange rates had not been used to mitigate the negative impact of savings measures. Also, why were savings generated by efficiency measures not used to implement mandated programmes? he asked.

He said he was concerned about the negative repercussions for mandated programme activities. Resolutions dealing with multilingualism had not been observed, in order to implement savings measures. Yet, specific provisions had been made for multilingualism in the budget. The Secretariat should bear in mind that mandates were specific goals to be attained within specific time limits. The report should be considered in informal consultations.

DULCE MARIA BUERGO (Cuba) said she endorsed the statement made on behalf of the "Group of 77" developing countries and China. She cited resolutions in which the Assembly had reaffirmed the budget process established under resolution 41/213. The resolutions had also reiterated the need for full implementation of all mandated programmes.

Was the delay in preparation of the Secretary-General's report on savings measures in keeping with some explicit decision? she asked. How could the Secretariat modify activities and ignore the paragraph stating that the

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authority of the Secretary-General to implement any proposal that modifies mandated programmes was subject to prior approval by the Assembly?

She said she was somewhat alarmed about the reduction of certain activities and services provided to Member States. Also, the principle of multilingualism had been violated. She was particularly concerned about information in the Secretary-General's report indicating that personnel cuts had impacted negatively on mandated activities. The Secretary-General's proposals to reduce staff by 1,000 posts were incomprehensible. She would be returning to that matter at a later date.

Vacancy rates were higher than those approved in resolution 51/214, she continued. The Assembly had never approved such rates. She would welcome an explanation for the reasons that led to lifting the freeze on recruitment only at the beginning of April, despite the fact that the Assembly had taken action on the matter on 18 December under resolution 51/456. Last July, the Secretariat had indicated that one could expect savings in the current budget as the result of fluctuating exchange rates. She requested information on the amounts saved at the end of September and the total amount expected at the end of the year. Resources released as a consequence of fluctuating exchange rates should be allocated to development activities.

SEYED MORTEZA MIR MOHAMMAD (Iran) supported the view of the Group of 77 on the report of the Secretary-General, a document that lacked adequate details. It was also not an improvement over previous ones in its analysis of the impact of savings on mandated programmes. He endorsed the view of the ACABQ that an analysis of the effects of efficiencies should be undertaken in the context of the programme performance report. The Secretariat should submit proposals that would enable it to overcome some of the shortfalls it had experienced in the implementation of mandates.

PETER MADDENS (Belgium), speaking for the European Union, and the Czech Republic, Romania, Cyprus, Slovak Republic, Slovenia and Latvia, spoke on the Secretary-General's comprehensive paper on additional expenditures related to peace and security, inflation and currency fluctuations. A machinery must be found to ensure the financing of new mandates that had not been included at the time that the regular budgets of the Organization were adopted. The establishment of a reserve fund to handle inflation and other fluctuation would be tantamount to setting up a fund for speculation, which would be hard to justify in the budgeting processes of national governments.

On the impact of the savings on the implementation of mandates, he said the ability of the Secretariat to meet its obligations had not been exhausted. The issue of the manner in which mandates were carried out should be part of the debate on the proposed budget 1998-1999. The debate on United Nations reforms, priorities and on "results-based budgeting" would be important.

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Mr. OYUGI (Kenya) associated his delegation with the United Republic of Tanzania's statement on behalf of the Group of 77 and China. The mandated programme of the United Nations Environment Programme (UNEP) and Habitat should be affirmed.

KAZUO WATANABE (Japan) said the question before the Committee was technical but substantial. He supported the concept of reinvesting savings accrued from the budget, with the amounts saved transferred to the newly created development programme. Surpluses from the strength of the United States dollar -- a currency that was 25 per cent stronger than expected -- should be reimbursed to Member States according to financial rules and regulations. The exact breakdown of savings and the surpluses should be provided by the Secretariat. Savings should be diverted to the development programme, but surpluses returned to Member States.

DJAMEL MOKTEFI (Algeria) said he regretted the late presentation of the report, which contained generalities that obfuscated the effects of savings measures. He agreed with the relevant comments made by the ACABQ regarding the impact on mandated activities. Observations on implementation of the 1996-1997 budget should be taken into consideration during consultations on the 1998-1999 budget. He agreed with the comments made by the representative of Cuba on fluctuations on exchange rates. Where resources were available, the Committee should reallocate them for programmes which might otherwise be negatively affected by savings measures.

WEN CHIN POWLES (New Zealand) said the Organization's management culture was changing to one able to prioritize, when necessary. The Secretariat should prioritize with efficiency, and the Secretary-General's report on savings measures indicated that Secretariat staff was learning to do so. She supported the efforts being made to improve efficiency, which often went unnoticed. Prioritizing outputs in the context of finite inputs was extremely difficult. Implementing mandates could be undertaken with flexibility, since over a two-year period needs changed, she said.

THOMAS REPASCH (United States) said he supported the Secretary-General's efforts to achieve the savings mandated by the Assembly. The savings measures had affected some programme activities more than others, but that was the meaning of setting priorities. He applauded those staff that had achieved the mandated savings without detriment to their programme.

MILES ARMITAGE (Australia) associated himself with the remarks made by the representative of New Zealand.

Mr. SACH, Director, Programme Planning and Budget Division, said the Secretariat was well aware that it could not modify mandates. Activities and services were distinct from mandates. Outputs and services supported the

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implementation of mandates. The Secretariat's approach had been to fully implement mandates, while bringing about the savings sought.

Regarding the delay in the report's issuance, he said there had been an understanding that it would be a report of the Office of Internal Oversight Services. The Secretary-General's report was produced without prejudice to the responsibility of the Oversight Office in that regard. On the matter of vacancies, he said that in resolution 50/214 there had been a requirement to maintain the vacancy rate at a specific level. Had that rate been maintained during 1996-1997, it would not have been possible to stay within the appropriated level of resources. The freeze had been lifted at the earliest feasible date.

Turning to the matter of the exchange rate savings, he said amounts reported in the first performance report of December 1996, which anticipated savings of $60 million, had been allotted to a number of programmes approved during the course of 1996. Exchange rates in 1997 were still somewhat speculative, because rates changed within a year. Anticipated exchange rate savings had been committed for programmes at the amount of roughly $27 million. Exchange rate savings expected through the end of September were anticipated to be $30 million. Final performance reports to be issued during December would contain all the information on exchange rate savings.

Mr. WATANABE (Japan) reiterated that transparency was of utmost importance. Information was needed on a timely basis.

MARTA PEÑA (Mexico) shared Japan's concern on the use of surpluses arising from the exchange rates and from efficiencies. The Secretariat official had not given the requested information, either orally or in writing, on the savings achieved from the late lifting of the freeze on recruitment. The Assembly would have wished that the Oversight Office would prepare the specific reports requested of it in relevant Assembly resolutions. She looked forward to the Secretariat's response to the questions raised by Cuba and Japan.

Ms. BUERGO (Cuba) expressed regret that the Secretariat did not lift the freeze on recruitment immediately after the adoption of a resolution by the Assembly requesting such action. On the question of exchange rates, she welcomed the information from Mr. Sach, but would follow up on some of the details he had provided.

SAMUEL HANSON (Canada) said that, if there had been a serious and substantial negative impact on the implementation of mandates due to the savings, they would be sufficiently described and substantiated in the Secretary-General's report. Since that had not happened, credit should be given to the imagination and dedication of the Secretariat's staff, who deserved thanks.

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Ms. BUERGO (Cuba) said that the report should be considered under the regular budget, and the Secretariat should provide all outstanding information requested this afternoon, to facilitate the Committee's deliberations.

Ms. PEÑA (Mexico) said the question should be considered when the proposed 1998-1999 budget was considered. The Secretariat should state at that time how much it had saved by lifting the recruitment freeze later than requested by the Assembly. When would the Secretariat submit the reports on gratis personnel loaned to the United Nations by governments and other entities? she asked.

Mr. SACH, Director, Programme Planning and Budget Division, said the Secretariat would try to get the information on what was saved from the late lifting of the recruitment freeze, but he could not say for sure when it would be submitted. On the outstanding six reports on gratis personnel, the first four of them would be provided by 30 November. Two others would be produced in March 1998.

Ms. PEÑA (Mexico) said it was paradoxical that two reports would be ready only in March, when the Committee was considering the negative impact of the $154 million in savings. If the Secretariat could not submit reports on time, why should it not ask for adequate staffing to enable it to do so? she asked. It was absurd for the Committee to have to wait until March to get the other two reports. Since four could be submitted by 30 November, the rest should be presented by the end of the year.

Statements on Peacekeeping Financing

TIKA JUNG THAPA (Nepal) aligned himself with the statement made yesterday by the Group of 77 and China. The former system of death and disability benefits had been unjust. He welcomed the Secretary-General's detailed claims programme, which the ACABQ had noted would simplify claims procedures. However, any proposal could be rendered useless by inadequate human and financial resources. Sufficient financial resources were needed to compensate for the "loss of lives and limbs" of peacekeepers.

Adequate staff resources were also needed to process backlog claims and correct imbalances within the Department of Peacekeeping Operations created by gratis personnel, he continued. The new claims procedure should include a mechanism to facilitate information flow between the Organization and the respective permanent missions for filing and settling claims.

Nepal's active support for the ideals of the Organization was illustrated by its participation in peacekeeping efforts, he said. Peacekeeping operations must always be matched by adequate resources; peacekeepers deserved nothing less. Contributions must be made in full and on time.

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ERNESTO HERRERA (Mexico) said he wished to voice certain concerns on death and disability claims, while not intending to interfere with any pending consensus. He supported the proposal for a time period for submission of third-party claims. The Secretary-General should make exceptions, but only on an equal basis, operating with consistency. Similar cases should be dealt with similarly.

Benefits should be subject to the fact that incidents resulting in impairment or loss of lives were service-incurred, he said. It was unfortunate that no definition of "service" had been provided. If the time between the arrival and departure of personnel was to be considered the time of service, then it would be feasible to determine whether incidents giving rise to death and disability were service-incurred. Procedures for making such a determination would be simple unless another definition of service, determining the viability of claims, was employed. He said he would welcome clarification of "service".

Turning to payment of benefits, Mr. Herrera asked whether there was a United Nations mechanism for determining beneficiaries. He asked whether consideration had been given to the possibility of giving beneficiaries benefits through checks to their governments, and said he would welcome receiving information on the matter.

YEO BOCK CHENG, Deputy Director, Peacekeeping Financing Division, Office of Programme Planning, Budget and Accounts, responding to a question posed by the Netherlands yesterday on the model memorandum of understanding, said that his concerns had been sent to the Office of Legal Affairs and an answer was expected shortly. On Pakistan's question as to what the Secretariat would suggest on the setting of a time limit on the submission of casualty claims, he said it would suggest that Member States be asked to submit them within 12 months of an incident, but no later than six months after the end of a peacekeeping operation's political mandate.

STEINER BJORNSSON, Deputy Director, Field Administration and Logistics Division, Department of Peace-keeping Operations, responding to Mexico on the definition of service, said that a procedure for a board of inquiry had been laid out in the Secretary-General's report on administrative procedures for the payment of death and disability benefits. Generally speaking, service- incurred incidents were related to normal behaviour in the areas of operation. Examples of exceptions would be "joy-riding" behaviour by, for instance, those on leave outside their areas of operation.

On the time it would take to clear the backlog of casualty claims, he said a new procedure was being introduced to handle such matters. It generally took a week for a staff member to finalize a claim. While five or six staff members were currently working on the claims backlog, it would take about two years to clear the foreseen workload. Though more than 4,000 reports of incidents had been heard, just above 1,000 claims had been filed,

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with many of them pending because the Secretariat was waiting for information from troop-contributing States. The best estimate was that it would take about two years to clear the claims backlog.

AMJAD HUSSAIN SIAL (Pakistan) said his delegation had never sought time limits on the submission of claims by Member States. His statement had asked whether reasonable time limits could be placed on the length of time it took to process claims for casualties. The system should not be subjected to extensive bureaucratic procedures, and he had not intended to place time limits on the filing of claims by Member States.

MICHAEL BOYNTON (United States) said it was important to be clear about the differences between the old and the new system of claims processing. He wished to see a resource reduction plan for the new system.

Mr. YEO said that, under the new regime, procedures would be streamlined. Permanent missions were still required to submit claims, although these would be simplified. The process would be faster because documentation would come primarily from the permanent mission rather than extensive supporting documentation pertaining to national legislations. As under the old arrangements, as soon as a review had been undertaken, claims would be paid.

Regarding the question of resource reductions arising from the implementation of the new procedures, he said he fully recognized the difference between dealing with the backlog under the old regime and dealing with claims under the new regime. As and when the claims backlog was eliminated, temporary assistance resources would not be needed. Savings from the new procedures would be related to the extra posts needed to process claims. The Secretariat would return to the Fifth Committee with information on whether those posts were required after the system had been fully implemented, perhaps in the Assembly's next session.

Mr. HERRERA (Mexico) said the definition of service was still not very clear. The ACABQ's report on the matter had also indicated that distinction must be drawn between "incident" and "accident".

Mr. BOYNTON (United States) said that he had understood that agreeing to the new claims process would result in resource savings. Waiting for the next session to receive information on the matter was not acceptable.

Mr. YEO told Mexico's representative that his concern would be raised with the Office of Legal Affairs, which would provide answers at the appropriate time. On the United States' question, he said he would talk to his colleagues in the Department of Peacekeeping Operations in order to work out what might be satisfactory to that delegation.

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Mr. SIAL (Pakistan) said 23 incidents had occurred since June, when the new death and disability benefits were approved, and no one would like to see the claims of those peacekeepers added to the current backlog. Therefore, the new claims arrangements and the resource requirements of the Secretariat to handle claims could be considered separately to help prevent a situation in which those who had recently lost lives or limbs would have to wait for long periods of time.

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For information media. Not an official record.