ADMINISTRATIVE AND BUDGETARY COMMITTEE TAKES UP IMIS PROJECT, UN INTERNATIONAL PARTNERSHIP TRUST FUND
Press Release
GA/AB/3220
ADMINISTRATIVE AND BUDGETARY COMMITTEE TAKES UP IMIS PROJECT, UN INTERNATIONAL PARTNERSHIP TRUST FUND
19980323 Serious concerns over the cost and management of the Integrated Management Information System (IMIS) were voiced this morning, as the Fifth Committee (Administrative and Budgetary) considered that project.The IMIS project is an integrated system for processing and reporting administrative actions at all major duty stations. Estimated in 1988 to cost $28 million, IMIS was reprogrammed and rebudgeted in 1994 and is now expected to cost more than $72 million.
Addressing the Committee, Under-Secretary-General for Management Joseph E. Connor said the failure rate on constructing information technology systems like IMIS was over 60 per cent. The initial cost estimate had been made for a different type of end product. No system available today had all the functionalities that the United Nations needed. Overall, if the decision had to be made again, IMIS would still be the best choice.
Responding to questions by delegations, the Acting Assistant Secretary- General for Central and Support Services, Toshiyuki Niwa, said Price Waterhouse was the IMIS contractor, which had been engaged through the normal selection and bidding process. It would not be practical to change contractors at this stage in view of the deadline looming ahead for IMIS, he added.
Among those commenting on the project was the representative of Bangladesh, who said the IMIS project was ill-planned and poorly executed. The contract for its implementation had been amended numerous times, and its costs had increased dramatically. Transparency and accountability should be strictly maintained in such a major financial undertaking. Some $2.5 million had been paid to the contractor as compensation for implementation delays attributable to the Organization. Yet, those delays had not been analysed or addressed objectively, according to the report of the Advisory Committee on Administrative and Budgetary Questions (ACABQ). Member States were owed explanations, he stressed.
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There should be an in-depth investigation to determine those responsible for the project delays, China's representative said. Furthermore, China was concerned about the United Nations ability to negotiate with contractors.
Canada's representative said it was important to remember that implementing information projects faced particular challenges regarding rapidly evolving technology. The project would never be entirely complete; future upgrades would always be necessary, and should be planned for. When such a system ceased to develop, it would become obsolete.
Statements on IMIS were also made by the representatives of the United Kingdom (on behalf of the European Union and associated States), Saudi Arabia, Cuba, Japan, United States, Algeria, Uganda and India.
Also this morning, the Committee began discussing the United Nations International Partnership Trust Fund, which the Secretary-General decided to establish to manage a 10-year donation -- totalling about $1 billion -- from Ted Turner, Co-Chairman of Time Warner. The Trust Fund will coordinate, channel and monitor contributions and requests for funds.
Committee members stressed that the Trust Fund was unique in the size of its resources. It would contribute to programme direction as outlined in the medium-term plan, approved by the General Assembly. Questions were raised regarding the establishing of the post of Assistant Secretary-General for the Fund.
The representatives of Algeria, United Kingdom (speaking for the European Union), Syria, Uganda, India, Cuba, Malaysia and Iran spoke on the matters.
The Chairman of the ACABQ, C.S.M. Mselle, introduced that body's reports. The Director of the Programme Planning and Budget Division, Warren Sach, responded to Committee members' questions.
The Committee will meet again at 3 p.m. today to continue consideration of the United Nations Code of Conduct.
Committee Work Programme
The Fifth Committee (Administrative and Budgetary) met this morning to continue its consideration of aspects of the programme budget for the biennium 1998-1999. It was expected to focus on a progress report of the Secretary- General on the Integrated Management Information System (IMIS) as well as on a report of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) on the United Nations International Partnership Trust Fund.
The Committee has before it a progress report of the Secretary-General on Integrated Management Information System project (document A/52/711), which provides an update on the current status of IMIS and on the operation of the system, together with a presentation of the work still to be undertaken. It states that during the past year, major progress was achieved in a number of areas. However, data problems and implementation difficulties far beyond any measures previously known or planned were also experienced. Solving those issues has entailed considerable unplanned effort and consequently created additional resource requirements.
The report lists a number of successes regarding the project. Those include: implementing improved operations of Release 3, financial and support services applications, at Headquarters; re-engineering of Release 2, staff entitlements, to take into account additional requirements and the integration with payroll; analysis and beginning of construction of Release 4, payroll; and implementation of IMIS Release 1 at four additional offices away from Headquarters (Addis Ababa, Geneva, Nairobi and Santiago).
The report states that further efforts are required in areas that include the following: improvements to the system, by making system changes to facilitate, among other things, implementation of offices away from Headquarters; completion of data standardization in both the personnel and finance areas to support the entitlements and payroll processing; review of processes, reports and procedures to facilitate the preparation of the financial statements; and improvement of interfaces and bridges that bring data into IMIS, especially from other duty stations.
T development and implementation process of IMIS has been extremely difficult, according to the report. The main reasons for those difficulties include the overall underestimation of the magnitude of the task when the project was launched, inadequate original specifications and lack of documented procedures. The situation was further affected by the fact that the budget had been prepared on the basis of reasonably expected costs without any cushion for unforeseen difficulties. It was known and reported that such adverse events could transpire -- and did in fact occur.
In spite of those difficulties, the report states that the United Nations has managed to develop and implement a system that functions and meets the specific requirements of the Organization. The improvements, for which
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additional resources have been requested, will greatly facilitate the work at all offices away from Headquarters and of the other organizations that use or may decide to use the system, and will provide a stronger basis for the future operation of the United Nations worldwide.
Also before the Committee is a report of the ACABQ on IMIS (document A/52/828), which considers the progress report of the Secretary-General on IMIS, as well as the related report of the Board of Auditors. The Advisory Committee welcomes the observations and recommendations of the Board of Auditors and fully concurs with them. The report states that the Advisory Committee had been informed by the Administration that considerable progress on the IMIS had been made, but points out that much remains to be done.
The Advisory Committee notes that the report of the Secretary-General provides an update of the current status of IMIS and the operation of the system together with a presentation of the work still to be undertaken. It also contains revised resource requirements for the development and implementation of the project and an overall summary of the estimated actual expenditures as at 31 December 1997, together with the status of the various activities as at 31 October 1997. The revised estimate of the project is $72.9 million, excluding maintenance costs, which reflects additional requirements totalling $10.4 million.
The report states that those additional requirements are attributable mainly to contractual services ($7.9 million) and general temporary assistance/overtime ($5.3 million) and also reflect an impact of reduced requirements under travel ($1.2 million), software ($0.6 million), training ($0.6 million) and hardware ($0.5 million). The requirements for contractual services of $7.9 million include an amount of $3.2 million for implementation support provided by the contractor since 1993, which in the view of the Secretary-General should not have been charged to the IMIS project budget. The Advisory Committee points out that the charge of $3.2 million was brought to the attention of the General Assembly four years after the contractor started to incur expenses in 1993.
Representatives of the Secretary-General informed the Advisory Committee, the report goes on, that a preliminary analysis of actual expenditures as at 31 December 1997 indicated that it might be possible to accommodate additional requirements of up to $7.4 million for the IMIS project within the overall limit of the final appropriation of some $2.5 billion for the biennium 1996-1997. In that connection, the Advisory Committee recalls that a number of outputs were deferred, postponed or curtailed during the biennium 1996-1997, adding that it will examine the feasibility of the Secretary-General's assumption with regard to the amount of up to $7.4 million.
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An annex to the Advisory Committee report concerns corrective action taken by the Administration regarding the IMIS in response to the recommendations contained in the report of the Board of Auditors. It notes progress in areas including the establishment of a plan of action for the completion of tables and periodic review of the accuracy of the data; development of diagnostic tools; and preparation of a comprehensive plan of action for all the outstanding problems generated in the System.
(For background information on the report of the Board of Auditors on the IMIS (document A/52/755) see Press Release GA/AB/3212 of 9 March.)
Another report of ACABQ transmits correspondence between its Chairman and the Secretary-General regarding the United Nations International Partnership Trust Fund (document A/52/7/Add.9). In his letter, the Secretary-General recalls that on 18 September 1997, the Co-Chairman of Time Warner Inc., Robert Edward Turner III (Ted Turner), announced that he would make a gift in support of the United Nations of an amount not to exceed 18 million shares of Time Warner stock, which on that date had a value of $1 billion. From that amount, Mr. Turner intends to make 10 annual gifts valued at approximately $100 million each.
The gift is to be used to assist the Organization in achieving the goals and objectives of the United Nations Charter through programmes and projects, according to the letter. It will represent a new financial resource to supplement regular, assessed or voluntarily funded programmes of the United Nations. In particular, projects of a humanitarian, developmental and environmental nature will be funded. Funding contributions will be made through the United Nations Foundation Inc., a public charity established by Mr. Turner.
The Secretary-General says he does not wish United Nations funds and programmes to compete in an uncoordinated fashion for funding from the Foundation. He plans to establish the United Nations International Partnership Trust Fund to coordinate, channel and monitor contributions. The Foundation will indicate its funding interests, which will form the basis for project proposals. An advisory board of United Nations officials and eminent personalities will be established to review prospective proposals. Having received the advice of the advisory board, the Secretary-General will decide which projects to recommend to the Foundation for consideration.
The Trust Fund will be responsible for the central administrative costs relating to the coordination and programming functions, according to the letter. The former costs are estimated at approximately 1 per cent of the contributions. The Fund's staffing will consist of an Executive Director, proposed at the Assistant Secretary-General level, one Director-level official, six Professionals and five General Service.
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A concept paper attached to the letter sets out suggested arrangements for programming the planned gift over a 10-year period. Proposals will be reviewed in the light of criteria such as urgency, effectiveness, innovation, and availability of funding from other sources. The Trust Fund will provide a consolidated mechanism for receiving and distributing funds and providing the monitoring and reporting necessary to ensure effective management, coordination and financial accountability. The Secretary-General will develop a quarterly rolling cash flow forecast based on the projects approved by the Foundation, which will form the basis for quarterly payments by the Foundation.
In the Advisory Committee's response, it asks to see the relationship agreement between the Foundation and the United Nations, which is currently being finalized, before it is signed. The ACABQ says that the Secretary-General's estimates on the central administrative costs of the Trust Fund, approximately 1 per cent of the contributions, seem underestimated. Each project document should clearly indicate the backstopping costs associated with the implementation of the activity concerned.
On enquiry, the Advisory Committee was informed that maintaining a standard 15 per cent operating reserve was not envisaged for the Trust Fund; it therefore trusts that every effort will be made to ensure that a steady and dependable cash flow is maintained, according to the letter. It also understands that the United Nations would bear no responsibility for funds raised by the Foundation and awarded directly to other entities (such as non-governmental organizations) instead of the Trust Fund and trusts that this fact is clearly specified in the relationship agreement to be finalized.
The Advisory Committee was informed that, with the exception of the proposed Executive Director post, the staffing requirements were a preliminary estimate and could be finalized only after the workload had been identified, the letter states. The ACABQ requests that it be provided with the staffing and workload information, including job descriptions, as early as possible, together with a complete administrative budget for the Trust Fund. It also requests that all subsequent administrative budgets be submitted to it for its prior concurrence on an annual basis.
The letter says the ACABQ believes that once arrangements for establishing the Trust Fund have been completed, the Executive Director's workload might be different, in which case the need for the post at the Assistant Secretary-General level would have to be reviewed. It therefore concurs that the Executive Director post be at the Assistant Secretary-General level, with the proviso that the level will be subject to review for the period after 31 December 1999, in the context of the Committee's examination of the administrative budget of the Trust Fund for the year 2000.
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Programme Budget for Biennium 1998-1999: IMIS Project
C.S.M. MSELLE, Chairman of the ACABQ, introduced the Advisory Committee's report on IMIS.
JOSEPH E. CONNOR, Under-Secretary-General for Management, introducing the report of the Secretary-General on IMIS, said that today IMIS was operational; transactions at Headquarters were processed through it daily by hundreds of staff. The Human Resources applications were being used at 10 locations and at three organizations around the world (12 locations and five organizations by the end of the year).
The system's size and complexity was described by the Auditors in terms of hundreds of transaction screens, hundreds of help screens, hundreds of users, and in terms of thousands and thousands of administrative events processed, he said. There was no integrated software package available at present that compared with IMIS, provided its entire set of functionalities and met the specific United Nations requirements. Most of the System had been completed with most of the original functionalities, but much work remained to be done.
Problems regarding the project had been reported and there were still problems facing it, he said. The reports of the Secretary-General and the Board of Auditors highlighted that situation. The project should not be seen in isolation, simply as an attempt to build a system, but in its entirety, as the largest change that had ever been introduced in the way the administrative processes were performed in the Organization worldwide.
The findings of the Auditors were in line with those determined earlier by the Administration, he said. In most instances, the Auditors confirmed and strengthened the corrective actions planned or put in place by the Administration as priority matters. Many of those corrective actions had been under way when the audit had taken place in June/July 1997 and the situation today reflected considerable progress. The report provided an overview of the situation, release by release, activity by activity. It highlighted the activities that remained to be completed and provided estimated costs for their completion. It provided a detailed description of the costs incurred so far for the project. Ongoing maintenance costs should not be included as project costs, he stressed.
The additional funding required for the IMIS project, if approved, would bring the total cost, excluding maintenance, to $72.9 million, he said. Attention should be drawn to the fact that a very delicate point had been reached, since the inadequacy of available funds prevented the undertaking of critical activities. At the end of last year $4.2 million had remained unspent. The General Assembly had given the ACABQ the authority to approve the usage of an additional $3 million. The Secretariat was awaiting the conclusions of the Fifth Committee's deliberations before asking it about the release of those funds.
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He said the projected expenditures for the current biennium concerned: contractual costs to complete payroll, support the closing activities, complete changes to Release 1, 2 and 3 to support payroll; staff costs to keep on board until the end of the biennium staff at offices away from Headquarters; training costs related to IMIS implementation at offices away from Headquarters; and staff and contractual costs to maintain staff and contractors until the end of the year to complete reports and improve bridges and interfaces.
TOSHIYUKI NIWA, Acting Assistant Secretary-General for Central and Support Services, Department of Management, said he would address some of the points contained in the ACABQ's report on IMIS. The contract for IMIS was awarded in 1991 after international competitive bidding. One of the underlying assumptions reflected in the proposal was that there would be limited expansion of the project, and that the specifications put forth were relatively stable. However, those specifications, developed in 1990, had proven inadequate.
It was common when dealing with large projects that specifications were inadequate, he said. The contract was renegotiated in early 1994, and it was assumed by both parties that the revised specifications, agreed upon in November 1993 for changes in Release 3, had been fixed. The agreement reached with the contractor was reviewed and commented upon by the Board of Auditors in 1994. In that same year, the project was reprogrammed and rebudgeted. Additional resources were requested and approved for contracted work. Changes in strategy could have been better documented. However, it was important to note that the contractor performed tasks on a timed basis and project services were verified by United Nations staff. Detailed documentation was available, including all the changes made in the system.
Had any other strategy been utilized at the end of 1994, that would have led to further delays and higher costs, he said. It was clear that the reprogramming and rebudgeting of the project in 1994 was necessary and should have been done earlier. The monitoring of the contractor's work was based on clear identification of the work the contractor was requested to do.
When the contract was awarded in 1991, its value amounted to 60 per cent of the approved budget, he said. Currently, it amounted to 54 per cent of the project's budget, including maintenance through the end of 1997. The increase in the value of the contract was due to the fact that the staff resources assigned to the team were inadequate. The magnitude and complexity of the task had been underestimated since the project's inception. The successful completion of the project was a primary concern. Failure would not be in the interests of Member States or of the Organization. The IMIS system was not perfect, but it was operational.
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NICHOLAS THORNE (United Kingdom) spoke for the European Union, Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia, Cyprus and Norway. He welcomed the requirement in IMIS that users abide by the United Nations financial rules and regulations. Further, he noted the fact that successful implementation of IMIS would require consultation with management and staff, as well as their cooperation.
While the Union welcomed the progress which had been made in implementing the IMIS project, it shared the ACABQ's concerns, he said. The reasons for the increase in the project's cost should be analysed, and perhaps complemented by independent external assessment. Such an analysis would help to rectify inadequacies in project management implementation and monitoring that had been identified by the ACABQ. Such a study could also be of use for the future maintenance and development of the system.
The Union agreed with the ACABQ's recommendation that the Secretary- General should explore the feasibility of reinstating the budget applications part of IMIS, he said. However, that should not be at the expense of further delay to the envisaged implementation schedule. Much remained to be done regarding the project. The Union recognized the technical difficulties inherent in the project. Noting the Secretariat's intention to complete payroll development by the end of June, as well as other milestones in its implementation schedule, he expressed the hope that at the Committee's next session further targets would have been met. The Committee might have to consider further steps to complete the system's successful implementation.
AHMED FARID (Saudi Arabia) said that his delegation could not accept the trend -- as detailed in paragraph 9 of the report of the Advisory Committee -- of revising the cost estimate of IMIS every few years. He agreed that the decision could not be made to grant additional funds to the project at this time. The Board of Auditors had mentioned that the time and cost overruns had been due to problems with the original cost estimates. That was a large and costly mistake.
Saudi Arabia agreed that the further analysis for the reasons of the increases should be carried out by the Office of Internal Oversight Services and that the results should be submitted to the Secretary-General, he said. He sought information on the reason for the increase of costs. That could not be compared to the cost of constructing a building, he added. It was cheaper at this point to demolish the building and buy a new one.
EVA SILOT BRAVO (Cuba) said her delegation found it troubling that after 10 years in existence IMIS was so costly for the Organization. The cost of the project had risen from some $28 million to some $75 million and it had still not been fully implemented. The audit of the Board of Auditors had identified a number of problems.
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It was impossible to supervise the implementation of the project because the final list of products and work plan had not been brought up to date, she said. It was also impossible to know if costs should be covered by contract warrantee. The Organization had become vulnerable to demands for additional payments from IMIS contractors. She agreed that no payment could be made until there was an updated system and updated work plan.
She requested the Secretariat to tell the Committee who were the contractors linked to the project and whether there had been an evaluation of changing the contractor. In Assembly resolution 52/213 A it had been decided that the additional appropriation of some $3 million could not be undertaken without the prior consent of the Advisory Committee. In the Secretary- General's report a need for an additional $7.4 million had been noted. There had not been adequate justification for authorizing that amount. There had been a proposal in the Secretary-General's report to take the additional amount from the unencumbered balance for 1997. She would like to see information on the total amount of the 1997 unencumbered balance for the project. There should be a re-evaluation of the request for additional funds for IMIS, she said, adding that the additional resources should be taken from the 1998-1999 biennium.
KOJI F.X. YAMAGIWA (Japan) noted that the project's cost had increased from the original estimate in 1988 of $28 million to $72.9 million -- excluding $22.5 million in maintenance costs -- as of 31 December 1997. While his delegation recognized the importance of improving technology in the United Nations, such costs were inordinately large. The Auditors' recommendations should be fully implemented. The development and implementation phase of the project should be completed at the end of 1999 at the latest. He asked for confirmation that the schedule would be followed.
He supported the ACABQ's request that the Office of Internal Oversight Services carry out an analysis of the reasons for the project's cost increase, he said. In addition, the Secretariat should negotiate with the contractors for fairer terms. As for the $10.4 million additional requirements, his delegation had concurred with the Secretary-General's proposal to approve $3 million in the final appropriation for 1996-1997, on the understanding that the amount had been obligated during the period. However, there had been no clear indication that that was the case. How much of the additional requirements of $10.4 million would be used to meet obligations from prior periods? he asked. The resources required for the 1998-1999 biennium should be requested in the context of the current programme budget.
HUMAYUN KABIR (Bangladesh) said the reports before the Committee testified to the fact that the IMIS project was ill-planned and poorly defined and executed. The handicaps that had begun at the planning level still plagued the project. It was not clear who was responsible for the mismanagement. Transparency and accountability should be strictly maintained in such a major financial undertaking. The contract had been amended
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14 times, from an initial estimate of $28 million to over $72 million. The contracting firm said the renegotiations were due to delays on the part of the United Nations. The Administration had had to pay $2.5 million as compensation for delays attributable to the United Nations. However, those delays had not been analysed or addressed objectively, according to the ACABQ's report. Why had the Organization been forced to bear that financial burden, and under what circumstances? he asked. Member States were owed explanations.
In the Auditors' report there was information to the effect that the Administration had contracted out tasks that it should have performed itself, he continued. He concurred with the Auditors that such a practice had increased the Organization's dependence on the contractor. His delegation endorsed the recommendation that in-house expertise on technical features be developed to reduce such dependence. His delegation noted with satisfaction the information concerning recruitment efforts for personnel for the project, and would be interested in obtaining information on the progress of those efforts.
In view of the varied problems arising out of the poor management, implementation and monitoring of IMIS, his delegation supported the ACABQ's suggestion that the Oversight Office should review all aspects of the project and submit a report to the Assembly's fifty-third session.
JAMES BOND (United States) said the United States had been interested in IMIS since its beginning and continued to be. It was interested in the subject both for its potential as well as the problems it had undergone. It was hoped that the end of IMIS's development was near and that the Organization would begin reaping the benefits of the extraordinarily complex project.
The Board of Auditor's report had provided the most comprehensive overview of the project, he said. The report was just one more example of the importance of good oversight. Of particular interest to the United States, of the findings in the report, was the considerable increase in cost for a system that would have fewer capabilities than originally envisioned.
While the United States would support the call for analysis of the project by the Oversight Office, it believed the Board of Auditors was in a better position to do it, he said. He noted, further, that the amount of the performance bond had not increased while the cost of the project had doubled. He called for information of the relevance of the performance bond at the current stage. The ACABQ's query in paragraph 12 of its report regarding erroneous charges was also a matter for question.
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The question of additional financing was troubling, he said. However, it was important for IMIS to achieve its full functionality. The United States would reluctantly accept the allocation of the additional $7.4 million from the 1996-1997 biennium.
DJAMEL MOKTEFI (Algeria) expressed profound concern about the many difficulties experienced in the implementation of IMIS. Poor management, implementation and monitoring had been noted. Those problems must be resolved. The 10-year-old project must be brought to an end. The lack of a long-term maintenance plan and the lack of a system for across the board consultation needed to be corrected. An integrated plan of action was needed.
The contract for IMIS and related requisition list had not been updated, he said. There was also a lack of staff to reduce dependence on outside providers. Algeria endorsed the recommendations of the Board of Auditors and the ACABQ and shared the questions raised by Cuba and Japan. Algeria was eager to have word on recruitment to fill the nine vacant IMIS posts, and supported the proposal of an Oversight Office study.
CHEN YUE (China) expressed concern over the problems that had occurred during the implementation of IMIS. China concurred with the comments and recommendations made in the reports of the Board of Auditors and the ACABQ. China was especially concerned that payments -- as stated in paragraph 11 of the ACABQ report -- had been made without due regard for the quality of deliverables. That should not have happened and should not happen again. Regarding erroneous payments made by the Administration, once that problem had been discovered every effort should be made to recover the overpayment.
Regarding the question of compensation for project delays, there should be an in-depth investigation to determine those responsible, she said. China was concerned about the United Nations ability to negotiate with contractors on equal footing. Adequate numbers of qualified personnel should be made available to carry out internal supervision and maintenance.
She said the formulation of the IMIS should result in efficacious carrying out of mandates. The United Nations had already paid out huge sums of money, including funds that the Organization should not have had to pay out. China hoped that the Administration would effectively carry out the proposals of the Board of Auditors and the ACABQ.
SAMUEL HANSON (Canada) said his delegation shared the concerns expressed by others about IMIS increased costs and deficiencies in project management. The project was unique in a number of aspects. However, that did not mean that ordinary principles of project management should be set aside. Rather, they should be closely adhered to and creatively implemented. There were lessons to be learned from the experience to date.
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In response to Mr. Connor's call for comparisons with similar projects, he recalled that he had been involved in comparable projects in Canada. Through that involvement, he was aware of smaller projects in which less had been spent and more had been delivered. The way to learn to implement projects was by doing them. Information technology projects were distinguished by the challenge of implementation in the context of rapidly evolving technology. At the beginning of such a project, it might seem that the needed hardware or software was not available commercially and thus had to be developed independently. However, what had to be custom built a few years ago might today be available "off the shelf" today.
In a project with such a long duration, the implementation plan itself must contain built-in opportunities to evaluate the projects' needs with the industry's needs, he said. That sometimes could include the abandonment of efforts in favour of new approaches. Such changes were not pleasant, but were sometimes necessary. It was important to remember that the purpose of the project had not changed. That purpose was to put in place a system for implementing the staff rules of the Organization. He did not expect to see the day when it could be said that the project was entirely complete. If anyone were to come before the Committee to make such a claim, his delegation would be incredulous. Future upgrades would always be necessary, and should be planned for. When such a system ceased to develop, it would soon become obsolete.
NESTER ODAGA-JALOMAYO (Uganda) asked for the oral presentations made by Secretariat officials and the Chairman of the ACABQ to be distributed in writing. He shared the views expressed earlier by delegates from Japan, Bangladesh and Canada. He agreed that there would not come a time when the project could be called complete. However, distinction must be made between updating the project and making it operational.
As his colleague from Saudi Arabia had said, the project could be compared to building a house, he went on. Someone decided to build a bungalow. As soon as the foundation had been laid, he changed his mind to build a five-story house. Upon building the third floor, he had realized there was a structural problem with the second floor (IMIS's Release 2). Instead of rectifying the problem, he decided to construct the fourth and fifth floor, and add a penthouse (implementing the system at peacekeeping operations). Meanwhile, engineers lacked experts to identify cracks and leaks in the structure.
To remedy the problems, the person could stop the house on a level the foundation could support, he said. Structural problems could be fixed, while masons could be brought in to identify and address problems. If those steps did not work, the contractor could be changed. At some point, the entire project could be abandoned and another started, which might be the cheaper alternative.
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The IMIS story was amazing but not surprising, because this was the United Nations, he said. Where else would it be possible to have a project of this sort protected? he asked. IMIS was terminally ill. To be treated, more resources were needed than Member States were being told. Member States must decide between two painful alternatives. First, they could abandon IMIS and try something else. Or, they could try to treat the system by committing substantial amounts to the project. If that option were selected, the Secretary-General should submit a comprehensive report detailing the resources needed to complete the work on IMIS to make it completely operational, so resources could be appropriated for the 1998-1999 budget. Also in that report, he should indicate the final date that the project would be handed over to in-house personnel.
The magnitude and complexity of the project had been underestimated from its inception, he continued. He endorsed the Auditors' recommendations A through K and hoped they would be implemented without further delays. He then joined the Cuban delegate's request for information on who the contractor was.
RAJAT SAHA (India) said India shared the concerns raised by previous speakers and endorsed the views of the Board of Auditors and the ACABQ. India wished to join Uganda's request to make available Mr. Connor's and Mr. Niwa's statements and looked forward to answers to questions raised by Cuba and Algeria. Making available proposals regarding course correction with justification would help to closely monitor IMIS.
ANWARUL KARIM CHOWDHURY (Bangladesh), Committee Chairman, said the presentations would be circulated this afternoon at the formal meeting.
Mr. CONNOR, Under-Secretary-General for Management, said it was fundamental to an understanding of the situation as it had developed that a deep line be drawn between the early 1990s and the redefinition that had occurred in 1994. The initial effort had been to follow the leader, the Food and Agriculture Organization (FAO), which had been customizing a package. That effort had been a failure -- the FAO had written off $30 million and had produced nothing. The United Nations had been caught with nothing to customize.
The failure rate on constructing systems of this type was over 60 per cent, he said. That was not a proud record of accomplishment and should be kept in mind. The initial concept on which the estimate of some $28 million had been made was for a different type of end product. There was nothing available today that had all the functionalities the United Nations needed. Overall, if the choice had to be made over, the Steering Committee would still opt for IMIS.
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There had been three surprises on the project, he said. On Release 1 there had been no straight accounting for who worked for the project. That did not mean that people were not being paid for not working. Control of the paper flow had been lost. Corrections had had to be made because IMIS would not accept junk.
Regarding Release 2, it had not been known how extremely complex entitlement disclosures were, he said. That complexity had to be accounted for. The Auditors were right that the release had been stopped and reprogrammed.
The third surprise had been the worst one, he went on. The conversion process of taking the balance had been rejected by the new system. A unprecedented analysis had been undertaken. The hard-working people of the IMIS team and in the Accounts Division were to be commended for their work on the conversion. That data was now under control -- $21 billion worth of transactions were now being processed.
Assurance could not be made that there were not going to be other surprises, he said. He wished to make clear that the project must be done by 1999. As it was year 2000 compliant, the system must be up and running. That was a daunting challenge. Implementation problems were being dealt with. There had not been a problem with integration. Nor had there been a stability problem. The $2.5 million for delays had been reviewed and would be followed up.
There was trouble with recruiting, he said. There was such demand in the market, until the year 2000, that such people were difficult to come by. They were getting close.
The second part of the project had been thoroughly vetted by the Board of Auditors in 1994, he said. They had recommended an increase in costs thought necessary. The current course of IMIS was consistent with their prior review of the technology and methodology employed.
It was fundamental that all the releases be hooked together -- they were inexorably linked, he said. Release 5 -- regarding the budget -- had been delinked and there might be other changes. It was necessary to remember that there was a common database. Information was entered into the system only once. The United Nations Development Programme (UNDP) was totally committed to IMIS and was working in collaboration with the Steering Committee.
There was no intention to expand the project, he said. Getting the system up and running by the end of 1999 was the priority.
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Mr. NIWA, Acting Assistant Secretary-General for Central and Support Services, Department of Management, said he was new to the Organization and was still learning but would do his best to respond to points raised by delegations. He wished to underscore that the work of the IMIS contractor was closely linked to that of the Secretariat. Therefore, whenever the performance of the contractor was being discussed the Secretariat's performance was also being discussed.
Price Waterhouse was the IMIS contractor, he said, stressing that a normal selection and bidding process had been undertaken.
Regarding the question about the possibility of changing the contractor, he said that it would not be practical. The Secretariat's work was closely linked to that of the contractors. As IMIS was working against a clock, maintaining the current contractor would be useful. Use of in-house capacity would help.
Regarding the performance bond, he said that the basic assumption had changed. The original IMIS project contract was to have been a fixed price contract. As had been explained, the work involved in the IMIS project had changed, as had the relevance of the performance bond.
WARREN SACH, Director, Programme Planning and Budget Division, Office of Programme Planning, Budget and Accounts, said the representative of Japan had asked about the disposition of the $10.4 million, and details concerning the $3 million -- part of the larger amount -- which had been approved by the Assembly at its last session. He said that the Assembly had approved $58.2 million for the project through the end of 1997. All of the $10.4 million being sought applied for the period 1998-1999. None of the money now being sought related to prior commitments.
Regarding the question about retained surpluses, he said that in the normal course of events, under the financial regulations, retained surpluses would be credited to Member States. However, there had been occasions in the past when Member States had chosen to use such surpluses for identified purposes. The ACABQ had recommended utilization of that procedure.
The Cuban delegate had asked for information regarding amounts of the surplus to be realized from the 1996-1997 budget, he continued. There was a very small anticipated surplus. Accounts were due to close at the end of the month, but at present, on the final appropriations approved last December, a surplus of $10.3 million was expected. Of that amount, $7.4 million was sought for IMIS activities. He had been asked how much of the $10.3 million related to economic and social development. Those sections of the budget, 17-20, had been slightly overspent.
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United Nations International Trust Fund
Mr. MSELLE, ACABQ Chairman, introduced the report of the Advisory Committee's report. The Secretary-General had decided to establish a Trust Fund to handle the donation to be given by Ted Turner, Co-Chairman of Time Warner. The ACABQ had communicated to the Assembly the contents of the information given to it, as well as its reply to the Secretary-General. The ACABQ concurred with the Secretary-General's request to establish a post of Executive Director at the level of Assistant Secretary-General, but indicated that it should be reviewed.
The Secretary-General should provide the Committee with the administrative budget for the Trust Fund, he continued. The ACABQ's report was not intended for action; it was for information purposes. After the Advisory Committee had received additional information, it would again report to the Assembly and recommend those actions it believed necessary. He reminded the Committee that the financial regulations required that acceptance of extrabudgetary resources that might give rise to obligations by Member States had to be communicated to the Assembly. That stage had not yet been reached; more information would be forthcoming.
Mr. MOKTEFI (Algeria) said his delegation was very interested in the exchange of correspondence between the Secretary-General and the ACABQ on the establishment of the Trust Fund. His delegation had also been interested in the ACABQ's comments that in light of additional information to be provided, it would determine whether or not the Assembly should be seized with the matter. The problems that might come up in implementing the Trust Fund should be studied by the General Assembly. It would be useful to refer to the Assembly all proposals regarding the Trust Fund. The Fifth Committee, as the Assembly's designated body to address administrative and budgetary matters, should be able to follow the implementation of the project.
Mr. THORNE (United Kingdom), speaking for the European Union, said he noted from the document that the Committee would be kept informed on the decisions the Secretary-General would take on the advice of the Trust Fund's advisory board regarding projects to be funded. He also noted the concerns of the ACABQ about costs for administering the exercise. The issue needed to be clarified. There could be no question of charges being made to the regular budget without the Committee being consulted in advance.
TAMMAM SULAIMAN (Syria) said the information provided in the document was new and would be followed with great interest. He had some preliminary comments to make on concepts found in the document. His delegation's main comment for the time being was that it would like the United Nations Foundation to be closely linked to the United Nations itself. When the Assembly had been discussing reform, it had been said that any gift to the United Nations was welcome but the role of the donor ended when the gift was given. That was true with the ongoing contact with the President of the
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United Nations Foundation. The Secretary-General was to submit to the two foundations on a regular basis financial data on the outputs and objectives. In his opinion, the Assembly should consider that matter as well. The question must be considered carefully, and would be followed with a great deal of interest. As the Chairman of the ACABQ had said, additional information should be provided to the Fifth Committee, so it could take a decision on the matter.
Mr. ODAGA-JALOMAYO (Uganda) said that this was the item that Uganda had least wished to take the floor on -- particularly as it was such a generous offer. Having read the report of the ACABQ, he wished for clarification on some points. He concurred with the ACABQ that that was not a normal trust fund and should be treated carefully so that it would achieve its desired goal.
He sought clarification regarding the role of the medium-term plan. Regarding the mention of pressing needs of the international community, he asked "Who is going to define the pressing needs of the international community?". Regarding the mention of non-governmental organizations (NGOs), he asked if that was a reference to all NGOs or if it focused on particular NGOs from a specific area. NGOs from the South were often excluded, he added.
Regarding efforts to ensure the Trust Fund's cash flow, he wondered what kind of efforts the ACABQ was requesting. Who was responsible for establishing the post of Assistant Secretary-General for the Fund? he asked. Clarification on that subject was called for. Uganda wished to request from the Office of Human Resources Management the number of posts that currently existed at the D-2 level and above -- by gender and nationality. He wished to see the number for 1996 and for now.
Mr. SAHA (India) said that during earlier deliberations on the United Nations financial situation his delegation had commented on the current issue and would not repeat itself. India aligned itself with the position of Algeria. India, too, called for clarification on the points raised by Uganda.
Ms. SILOT BRAVO (Cuba) said Cuba supported the comments and concerns expressed by Syria, Algeria and Uganda, especially with respect to the role to be played by the Fifth Committee regarding consideration of the item. Cuba had a number of questions that would require further clarification. Cuba expected that the decision to be taken would take into account the concerns raised by the Committee.
KARMAIN MISRAN (Malaysia) sought more information on the decision to establish the Fund. He asked whether Member States were in a position to comment on its establishment, adding that Member States were especially interested in the terms guiding the Fund.
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SEYED MORTEZA MIRMOHAMMAD (Iran) had a query regarding the staffing and support costs as mentioned in paragraph 2 of the Secretary-General's letter. Were those costs to be funded from the Trust Fund or from other sources?
Mr. MSELLE, Chairman of the ACABQ, said that regarding the question of providing for a steady and dependable cash flow, an operational reserve was meant to provide funding for an account, pending receipt of contributions. If one read a number of interim accounts in the financial statements one found areas where expenditure exceeded income. The Advisory Committee had pointed that out from time to time. Efforts should be made by the Secretariat to ensure a steady cash flow so that it did not make commitments without having in hand the necessary cash. The Advisory Committee was aware of cases where funds were borrowed pending receipt of contributions. That was to be avoided.
Regarding the establishment of the Executive Director post, he said that all extrabudgetary posts at D-1 level and above must be approved by the Advisory Committee. There had been an Assembly resolution to that fact. The Secretary-General had proposed the post -- the Advisory Committee had concurred, but had also asked to see a proposed budget.
The staffing for the Trust Fund would be paid for by the Fund itself, he said. Regarding the role of the Assembly in establishing the Fund, he said it was being established by the Secretary-General. The Secretary-General received many donations and established many funds. There was nothing unique in the current situation. Regarding questions raised about the letter of the Secretary-General, he said he did not want to speak on the Secretary-General's behalf.
Mr. CONNOR, Under-Secretary-General for Management, said that the relationship agreement for the Trust Fund was not yet finalized. The Secretariat was mindful of the commentary of the Chairman of the ACABQ, and, consequently, included in the agreement would be an arrangement to ensure that the Trust Fund did not borrow.
The Secretary-General felt that such contributions were meant to supplement, not replace regular assessed and voluntarily funded contributions of Member States. The Secretary-General took full responsibility regarding what was proposed for outside funding, and was very much involved in that process. It was not thought there would be a conflict with goals set out in the medium-term plan. Project proposals were to be made by the various parts of the United Nations to the Secretary-General in his capacity as the Chief Officer of the Trust Fund. He would decided which proposals were to be submitted for possible funding.
Mr. CHOWDHURY (Bangladesh), Committee Chairman, asked how the Committee wished to take action on the report.
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Mr. MSELLE suggested that the Committee take note of the report of the ACABQ.
Mr. CHOWDHURY (Bangladesh), Committee Chairman, proposing possible ways for a Committee decision, said it would take note of the report of the ACABQ on the Trust Fund and request the Secretary-General to take into account comments made by its members and to consult Member States on a regular basis.
Mr. ODAGA-JALOMAYO (Uganda) said that this was a very unique Trust Fund indeed. Did the Committee have to take action on the current report? And if so, could it be taken this afternoon?
Mr. CHOWDHURY, (Bangladesh), Committee Chairman, said it had not been his intention for the Committee to act right now. He added that he felt it was important for the Committee to act on the reports of the ACABQ. He expressed the hope that action could be taken this afternoon or later.
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