INTERNAL OVERSIGHT OFFICE DOES NOT TRANSGRESS ITS MANDATE, FIFTH COMMITTEE INFORMED

Press Release
GA/AB/3192

INTERNAL OVERSIGHT OFFICE DOES NOT TRANSGRESS ITS MANDATE, FIFTH COMMITTEE INFORMED

Anyone who charged the Office of Internal Oversight Services with going beyond its mandate would be challenged because the Office never attempted to transgress the terms of the General Assembly resolution establishing it, the Fifth Committee (Administrative and Budgetary) was told this morning as it concluded considering the work of that Office.

Speaking in response to the questions raised by delegations in previous meetings, Under-Secretary-General for Internal Oversight Services, Karl-Theodore Paschke, emphasized that his Office's work was guided by the mandate it received from the Assembly.

For example, he said, while the Office did not take part in the United Nations budgetary process, its identification of inefficiencies led to reductions by pre-empting the spending of money on certain programmes by departments and field missions.

Assembly resolution 48/218 B, of July 1994, created the Office to enhance oversight functions within the United Nations through intensified evaluation, audit, inspection, investigation and compliance monitoring, according to the Office's third annual report. It stressed the proactive and advisory role of the Office.

Also this morning, the Committee continued its consideration of reports and financial statements of the Board of Auditors.

Speaking on the Auditors' reports, the representative of the United Republic of Tanzania said, on behalf of the "Group of 77" developing countries and China, that the Office of the United Nations High Commissioner for Refugees (UNHCR) should establish supplier rosters on as wide a geographical

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basis as possible and seek potential vendors in developing countries. He recalled that 74 per cent of vendors selected by the UNHCR came from 13 developed countries and about 75 per cent of the value of contracts were awarded to suppliers there.

The measures taken by the UNHCR to respond to the recommendations of the Board of Auditors and the extraordinary circumstances in which it operated should be given due consideration, Japan's representative said. The UNHCR was responding to the Board's recommendations, despite mitigating circumstances.

Statements on the reports of the Oversight Office and the Board of Auditors were made by the representatives of Norway, United States, Belgium (speaking for the European Union), Cuba and Mexico.

The representatives of Pakistan, Cuba and United States spoke on the Committee's programme of work.

The Fifth Committee is scheduled to meet again at 10 a.m., on Monday, 17 November, to take up the United Nations common system.

Fifth Committee Work Programme

The Fifth Committee met this morning to continue its discussion of audited financial statements and reports of the Board of Auditors. In addition, it planned to conclude its consideration of the Secretary-General's report on the Office of Internal Oversight Services.

(For background on the Auditors' reports, see Press Release GA/AB/3190 of 11 November; for background on the report on the Office, see Press Release GA/AB/3185 of 5 November.)

Statements on Auditors' Reports

TRYGGVE GJESDAL (Norway) said he fully supported the recommendations made by the Board of Auditors in its reports. In light of the economy measures imposed by the Organization's grave financial situation, the Board's mandate had become ever more important. The overall structure of audit and oversight bodies in the Organization was now satisfactory and operating in a fairly cooperative manner. While audit findings were receiving greater attention -- both from delegations and the general public -- the follow-up to audit recommendations was uneven. That was a matter of concern, because an audit activity was only as useful as its follow-up.

The United Nations system as a whole should cooperate to enhance the capacity and impact of executing agencies and organizations, he said. Towards that end, the Board's findings at the end of the budget biennium should be considered collectively, preferably in the context of the Administrative Committee on Coordination (ACC).

Turning to the Board's report on the United Nations High Commissioner for Refugees (UNHCR), he noted that several irregularities had been found related to implementing partners. Because UNHCR was a field-oriented agency, the circumstances in which it operated provided a particular challenge for oversight functions. It was generally a well-managed agency, and perhaps the Board's report did not do full justice to its strengths.

He said he supported the Board's recommendations on the need to review the programme delivery and administrative costs of the UNHCR. Its recommendations on procurement and human resources were very relevant in light of the agency's increased decentralization. He looked forward to the Board's upcoming report on improving implementation of its recommendations.

DAUDI NGELAUTWA MWAKAWAGO (United Republic of Tanzania), speaking on behalf of the "Group of 77" developing countries and China, said the United Nations Institute for Training and Research (UNITAR) should take seriously the recommendations and findings of the Board to correct deficiencies. He expressed concern that some recommendations dating back to 1993 had not been implemented and called on the administration to take steps to implement past

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and present recommendations. He expressed satisfaction that the Board had found no new weaknesses or errors, and had given an unqualified opinion on UNITAR's financial statement for the year ended 31 December 1996.

The Group of 77 and China endorsed the Board's view that long-standing deficits under the special purpose account funds should be resolved promptly and that action should be taken to clear outstanding accounts UNITAR deemed uncollectible, he said. He supported the view of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) that the advice of the Office of Legal Affairs should be sought in settling the unresolved charges between UNITAR and United Nations Headquarters. While UNITAR had improved its programme planning, monitoring and evaluation, there was room for more efforts in that regard.

On UNHCR, he said the Group of 77 and China viewed with grave concern the more extensive problems found in the body. Non-compliance, in some cases, with United Nations Accounting Standards had been found, and corrective measures should be taken. The Group and China supported the Board's recommendations on the timely submission of audit certificates by implementing partners, transparency in accountability for programmes, the non-recurrence of the circumstances that gave rise to the refund of pledges and overstatements of income. It also supported the recommendations relating to the need to improve investment of funds and to address security lapses which had led to loss and theft of property. Such incidents should be investigated.

Noting the deficiencies in the engagement of consultants as stated in the Board's report, he said the Group of 77 and China supported the recommendation on the use of such personnel. Efforts should be made to ensure the use of in-house expertise before engaging consultants. The terms of reference of the consultants should be clearly spelt out, with timetables for the delivery of services and measurable outputs. They should be chosen on the widest possible geographical basis, with greater use of the roster. Efforts should be made to avoid the engagement of the same consultants for long periods; that could be achieved through improved personnel planning practices. The UNHCR should consider adapting the recently installed asset management system of the Department of Peacekeeping Operations.

While there had been improvements in UNHCR procurement, he said that the Group of 77 and China was concerned that 74 per cent of vendors selected were from 13 developed countries; about 75 per cent of the value of contracts had been awarded to suppliers in those States. Steps should be taken to establish suppliers rosters on as wide a geographical basis as possible and to identify potential vendors in the developing countries, with a view to increasing their representation in the bidding for contracts.

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KOJI F.X. YAMAGIWA (Japan) stressed the important role that oversight bodies played in the Organization. Oversight bodies should retain their separate identities. However, cooperation among them should be increased. He commended the layout and construction of the Board's reports, which were extremely user-friendly and facilitated understanding and analysis. Their layout should serve as a model for other long reports.

The measures taken by UNHCR to respond to the Board's recommendations, as well as the extraordinary circumstances in which it operated should be given due consideration, he said. He welcomed initiatives it had taken to respond to the Board's recommendations, despite mitigating circumstances. For example, with respect to the Board's recommendation to obtain project monitoring documents, UNHCR faced difficulties such as expenditures in many locations, inadequate staffing by implementing partners, and the use of different currencies. Still, among its many efforts to respond to recommendations, the UNHCR was currently screening its implementing partners for their capacity to produce reports in a timely manner.

SUSAN M. SHEAROUSE (United States) said her delegation strongly supported UNHCR's efforts to correct identified shortcomings. Its continuing failure to obtain audit certificates from implementing partners was a particular concern. Long-standing deficiencies should be corrected.

On UNITAR, she said the United States was astonished that audit recommendations -- which had been repeated annually since 1993 -- on the need for a strategy for dealing with deficits on special purpose grants had not yet been implemented. Why had UNITAR dragged its feet on the matter? she asked.

The current three-year term of office for Board members should be changed, particularly since the United Nations had used a two-year budget cycle for quite some time, she said. While her delegation was flexible on the specifics, it supported a six-year term limit.

PETER MADDENS (Belgium), speaking for the European Union, emphasized the need to implement all recommendations of the Board, particularly at a time when the Organization was going through reforms.

Statements on Internal Oversight

KARL-THEODORE PASCHKE, Under-Secretary-General for Internal Oversight Services, responded to questions asked at previous meetings by, for instance, the representative of Canada, on quality control. The Office ensured that the quality of work of its various divisions was closely monitored at all stages, with final versions of reports cleared by him personally before publication. He then explained how quality was assured in the various functions undertaken by the Office, such as inspections, audit and evaluation. Effective communications with the Office's clients were ensured. In investigations, for example, the Office stressed the need to obtain corroborating evidence before

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charges were made. Even the evidence gathered by investigators was checked for deficiencies. He said he took exception to the extensive references to events that took place before the creation of the Office, as contained in the statement by Canada's representative. Responding to a previous statement by the representative of Egypt, he said focal points had been created in various departments, offices and field missions to ensure liaison with the Oversight Office and the implementation of its recommendations. A case of irregularity in the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) had been turned over to the appropriate legal authorities for prosecution. To questions posed by the representative of Cuba, he said draft reports submitted by the Office included the views of programme managers. Detailed explanations of the different categories of savings brought about by the Office had been provided previously. Those categories -- recoveries, expenditure reduction, prevention of excessive or unjustified expenditure, budget reduction in 1996-1997 -- were used in the tables on cost savings and recoveries contained in page 14 of the annual report. He said the budget reductions suggested -- in the case of the United Nations Transitional Administration for Eastern Slavonia, Baranja and Western Sirmium (UNTAES) and the International Criminal Tribunal for the Former Yugoslavia -- were not part of the $104 million savings mandated by the Assembly in 1995. The issue of the United Nations access control system had been reported on in a previous report from the Office. The Office, as Cuba had stated, did not have a right to intervene in the United Nations budgetary process. All it did was point out some inefficiencies and waste of resources in time to ensure preventive action. Its recommendation were made proactively, before certain proposed amounts of money were spent. Quality was a prerequisite for outsourcing, he said. The question raised by the representative of Bangladesh, he said, had been reported on and emphasized in a previous document submitted by the Office. As to the statement by Mexico, on the Mexico City regional office of the Economic Commission for Latin America and the Caribbean (ECLAC), he said that all activities by the Oversight Office were guided by the mandate it received from the Assembly. The Office made no attempt to go beyond its mandate, and challenged anyone who said the Office did. EVA SILOT BRAVO (Cuba) said she appreciated the Under-Secretary- General's responses, but that some questions raised by Member States had not been addressed. She would leave certain issues for consideration in informal consultations and return to them at an appropriate time. ERNESTO HERRERA (Mexico), thanking the Under-Secretary-General for his comments about the activities carried out by the Oversight Office at the ECLAC office in Mexico, asked for further clarification. With respect to the Under- Secretary-General's last comment, he said there were certain mandates to which all bodies of the United Nations system must conform. He had no doubt that the Oversight Office acted within those confines.

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