HUMAN RESOURCES, AUDITORS’ REPORT AND PROGRAMMING PLANNING DISCUSSED IN FIFTH COMMITTEE

Press Release
GA/AB/3404

HUMAN RESOURCES, AUDITORS’ REPORT AND PROGRAMMING PLANNING DISCUSSED IN FIFTH COMMITTEE

Never before had such concrete mechanisms of accountability been developed and implemented at the United Nations, the Assistant Secretary-General for Human Resources Management, Rafiah Salim, told the Fifth Committee (Administrative and Budgetary) this morning, as it continued its general debate on human resources management.

Summing up the discussion on that agenda item, Ms. Salim further said that each of the building blocks of human resources management reform envisioned specific accountability mechanisms. Many tools had been put in place, including the performance management plan between the Secretary-General and the heads of departments and offices, which was the ultimate performance appraisal system. The proposed Accountability Panel, chaired by the Deputy Secretary-General, would provide internal review of the various oversight reports. Accountability mechanisms were intended to supplement existing procedures, which addressed fraud, gross negligence and other disciplinary matters.

Regarding the issue of equitable geographical representation, she said that the number of unrepresented Member States had been reduced over the past four years from 25 to almost 20 per cent, although four new members had joined the United Nations during that period. Also, the number of under-represented Member States had been reduced from 20 to eight -- a 60 per cent decrease. The Secretary-General was determined to continue his efforts to ensure full and equitable geographical representation of all Member States.

In a lively discussion that followed her statement, several speakers, including Inspector of the Joint Inspection Unit, Fatih Bouayad-Agha, said that little progress had been made in the administration of justice at the United Nations. Speakers also stressed the need to strictly observe the General Assembly decision to apply the equitable geographic distribution criterion to the competitive examination for staff movement from the General Service to the Professional categories. The representative of the Russian Federation requested that the results of the latest G to P examination be cancelled, as they contradicted Assembly resolution 53/221.

The representative of Syria said that that despite Ms. Salim’s statement that staff opinions had been incorporated into reports by the Office of Human Resources Management, those views had not been properly taken into account. For example, the staff had registered reservations on the proposed system of contractual arrangements. The Secretariat had not provided sufficient

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justification for its proposal to set aside the existing contract system (permanent and temporary).

The representative of Libya said it was ironic that the United Nations was asking Member States to implement the guidelines of the International Labour Organization without accepting them itself.

On the question of mobility, the representative of Cuba said that while that sound practice should be promoted, it should not become a condition for promotion of staff. Also, there should be a distinction between mobility between departments and duty stations.

Also speaking on human resources were the representatives of Jamaica, Egypt, Chile, and Algeria.

Also this morning, the Chairman of the Board of Auditors, John Bourn, introduced 16 reports from that body. Related reports of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) were introduced by C.S.M. Mselle, Chairman of that body.

Representatives of France (on behalf of the European Union and associated states) and Canada spoke on that agenda item. United Nations Controller, Jean- Pierre Halbwachs, spoke in response to questions.

Another agenda item addressed in this morning’s meeting was programme planning. Addressing it were the representatives of Nigeria (on behalf of the “Group of 77” developing countries and China), Cuba, Indonesia, Colombia (on behalf of the Rio Group), Ethiopia and the Russian Federation.

The Committee will continue its general discussion of reports of the Board of Auditors at 10 a.m. tomorrow, 7 November.

Committee Work Programme

The Fifth Committee (Administrative and Budgetary) met this morning to conclude its consideration of human resources management and programme planning (for background information on human resources, see Press Release GA/AB/3398) and to begin consideration of the financial reports of the Board of Auditors, which contain the audited financial statements of various United Nations bodies and the audit opinions on them, as well as the Board's recommendations.

The report of the Board of Auditors on the United Nations (document A/55/5 (Vol. I)) states that upon review of the operations of the Organization, the Board had found that arrears in assessed contributions had decreased from $473 million at 31 December 1997 to $244 million at 31 December 1999, or by $229 million (48 per cent). That represented about 10 per cent of the total assessed contributions. At 31 December 1999, the United Nations General Fund owed $78 million to the United Nations Working Capital Fund, $47 million to the United Nations Special Account, and $58 million to the peacekeeping reserve. The Office for the Coordination of Humanitarian Affairs at Geneva had not established a policy on advances made from the non-earmarked Disaster Relief Assistance Fund. Accounts receivable of $25 million, excluding unpaid assessed contributions receivable, had been outstanding for more than one year. According to the report, in general, the Board was pleased to note the progress made by the International Civil Service Commission (ICSC) secretariat in implementing its recommendations, but it looks forward to further progress on the development of certain areas.

Release 3 of the Integrated Management Information System (IMIS), covering accounting, financial and travel applications, has not yet been fully developed to enable the preparation of consolidated financial statements on the basis of a consolidated database or to provide an adequate audit trail between IMIS-generated reports and financial statements, the report states. Furthermore, the administration has not yet implemented an important recommendation to provide detailed information about debtor-creditor identity. That has resulted in errors and inconsistencies in the financial records. The IMIS has, in addition, no facility to transfer data into archives and, therefore, reports produced by IMIS that are intended to provide information on the current biennium continue to include data relating to previous ones. As a result, IMIS data will continue to accumulate, and the operation of the system will increasingly slow down.

The reports further says that in four procurement-related arbitration cases, the United Nations was judged liable to pay compensation in a total amount of $12.2 million to contractors, mainly because of deficiencies in contract formulation, interpretation and implementation. The Procurement Manual requires the Office of Legal Affairs to review contracts and amendments in excess of $200,000 involving major changes of terms and conditions, or if the contract is not essentially identical to another contract previously reviewed by the Office. However, the Procurement Division did not submit for review two contracts valued at a total of $24 million that fell into this category. Despite the contention of the Office of Legal Affairs that it uses a standard process and criteria for short-listing prospective arbitrators and outside counsel, the Board was concerned that the process was not sufficiently transparent.

In four of 17 procurement-related arbitration cases reviewed by the Board, outside legal counsel were allowed to commence work before the contracts had been signed by all parties. In one contract for legal representation by outside counsel in a procurement-related arbitration case, the fee cap was increased from $0.59 million to $2.46 million over a period of only about two years. In the engagement of outside legal counsel for procurement-related arbitration cases, the functions of selection, recommendation of appointment, proposal of contracts and request of payment for services rendered were all vested in one person in the Office of Legal Affairs.

Because of the old procedure of billing for conference services after the end of meetings, conference services at the United Nations Office at Nairobi suffered a shortfall of income over expenditure amounting to $142,729 for the biennium 1998-1999, the report notes.

Also according to the report, the Audit Management and Consulting Division of the Office of Internal Oversight Services had not documented its evaluation of the United Nations internal control system. The administration had not established a system to ensure that claims submitted by the insurance companies in respect of health insurance programmes for staff members were valid and accurate. The administration had also not conducted, since 1989, a joint opening/closing inventory of the stocks of the United Nations newsstand facility at Headquarters, and there was, thus, no basis for determining the change in the value of inventories to be paid either by the Organization or the contractor.

The Board made recommendations regarding improving financial procedures, strengthening internal financial controls, making accountability more transparent, and enhancing the capability of IMIS.

The report of the Board of Auditors on the International Trade Centre UNCTAD/WTO (document A/55/5 (Vol. III)) contains the Board’s recommendations to improve compliance with accounting and disclosure requirements and to strengthen efforts to obtain funding.

According to the report, the level of activities financed by trust funds continued to rise, increasing in 1998-1999 by 12 per cent to reach $22.9 million. However, the decline in United Nations Development Fund (UNDP)-funded activities persisted, dropping down to $4.5 million during the biennium -– 38 per cent lower than in 1996-1997. Despite that fact, the overall project delivery reached $27.4 million -- basically the same level as the prior biennium.

Approximately half the Centre’s activities are financed by extrabudgetary funds, and the other half by the regular budget, the report states. The assessed portion is allocated to the Member States of the United Nations and the State members of the World Trade Organization (WTO) in equal share. The current administrative and budgetary arrangements between the two organizations were decided by the General Assembly at its fifty-third session.

Upon review of the operations of the International Trade Centre UNCTAD/WTO, the Board of Auditors found that the Centre has not yet complied with the requirements of the United Nations System Accounting Standard, introduced in October 1999, to disclose liabilities for end-of-service benefits, post-retirement benefits and annual leave. Implementation of IMIS had to be deferred because the system did not meet the Centre’s specific reporting requirements to report in Swiss francs and United States dollars.

The Board also found that, for the initial budget of $10,344,100 for the Joint Integrated Technical Assistance Programme, the International Trade Centre had secured pledges of $7,548,270 at 31 December 1999, of which only $5,043,919 had been received. Although the Centre manages the programme delivery of the Joint Integrated Technical Assistance Programme on a “cluster basis”, whereby activities are grouped around 15 themes, the system does not provide information on expenditure incurred against a particular cluster. The Centre’s Corporate Management Information System was developed at a cost of $290,000, but the data has not been kept up to date and the system was not, therefore, providing an accurate or reliable summary of achievements against the annual operations plan.

The report on the United Nations University (document A/55/5 (Vol. IV)) states that the Board has audited the operations of the United Nations University (UNU) at its headquarters at Tokyo. It has also validated the financial statements of UNU for the period from 1 January 1998 to 31 December 1999.

The Board has found that a loss on sale of security and equities amounting to $4.8 million was offset against a gain of $20.7 million and presented in the financial statements as a net gain of $15.8 million. The Board is concerned that the presentation of the gain and loss on sale of securities and equities in net terms is not in accordance with the United Nations System Accounting Standards. At 31 December 1999, there were total unpaid pledges of $10.5 million, excluding pledges for future years, $10.4 million (99 per cent) of which have been outstanding for more than five years, included an amount for $3 million and another for $3 million which have been outstanding for 24 and 13 years, respectively. In the absence of a provision for these amounts, the Board has accordingly qualified its audit opinion.

Also according to the report, the liquidity of UNU remains high, and its total reserves and fund balances have consistently been increasing, at an average of 12.8 per cent during the last two bienniums. No procurement plan has been prepared and procurement is done on a piecemeal basis, which prevents the University from enjoying the benefit of economies of scale through bulk purchase.

The Board recommends that UNU adhere to the United Nations System Accounting Standards, and strengthen management of human resources and procurement procedures.

According to the Auditor’s report on United Nations Children's Fund (UNICEF) (document A/55/Add.2), the Board’s main findings are as follows: the financial operations of UNICEF for 1998-1999 ended with an excess of income over expenditure of $138.4 million, compared with a shortfall of $14.6 million declared in 1996- 1997. The UNICEF has changed its financial regulations to reflect the new definition of programme expenditure approved by its Executive Board in September 1999. Despite the improvement in programme implementation rate, from 72 per cent in 1998 to 77 per cent in 1999, programme implementation levels during 1998-1999 were below the benchmark of 80 per cent.

The Office of Internal Audit’s coverage of 38 field offices in 1999 was higher than the 36 such audits undertaken in 1998, the report dates. The coverage in both years exceeded its annual planned coverage of 28 field offices. Working papers of the Office of Internal Audit were not indexed and cross-referenced to provide the necessary audit trail to facilitate review, and there was no evidence of supervisory review of the working papers. The Private Sector Division’s net consolidated income from regular and other resources of $356.4 million exceeded its approved budgeted income of $311.2 million by $45.2 million and was higher than the actual income of $272.6 million recorded for 1998. The UNICEF secured the agreement of the National Committees to transfer their net sales proceeds to the organization on a quarterly basis, instead of six months after the end of the fiscal years of the National Committees.

The Board made recommendations to improve programme management, strengthen the control and monitoring of expendable property, and improve the functioning of the Office of Internal Audit.

In its report on the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) (document A/55/5/Add.3), the Board of Auditors found that the Agency had declared a surplus of $2.08 million of income over expenditure for 1998-1999, as against a deficit of $21.2 million for the biennium 1996-1997. The value of land and buildings of $298.7 million was not capitalized and included in the statement of assets, liabilities and fund balances as at 31 December 1999, resulting in the understatement of total assets. The Board has decided not to qualify its audit opinion on this matter pending the outcome of the revision of the financial regulations of UNRWA.

A total of $24.2 million from regular budget funds that had been applied to specific-purpose projects prior to the receipt of funds from donors was outstanding as at 31 December 1999, the Board states. Two governments subjected the Agency to direct taxes and customs duties totalling $24.58 million, which is contrary to the Convention on the Privileges and Immunities of the United Nations. Out of the overpayment of extended monthly evacuation allowance and educational grants totalling $299.143 made to 14 staff members, an amount of $37,959 had been recovered by the administration, leaving a balance of $261,183 outstanding as at 31 March 2000. Also, the Agency could not physically locate some 500 non- expendable property items on its inventory listing. The inventory listing had not been updated since 1996, and it showed incorrect locations of non-expendable property items.

The Board recommended that UNRWA review its policy on the pre-financing of donor-specified projects and strengthen its efforts to recover outstanding tax reimbursement and all overpayments relating to extended monthly evacuation allowances and education grants. Also, the administration should improve its asset management system and the presentation of financial statements.

Concerning the United Nations Institute for Training and Research (UNITAR) (document A/55/5/Add.4), the Board found that UNITAR did not disclose in notes to the financial statements the value and method of valuation of non-expendable property or the amount of liability for end-of-service and post-retirement benefits. The Special Purpose Grants Fund had a net shortfall of income over expenditure of $568,608 in 1998-1999, compared with a net excess of $415,867 in 1996-1997. The process of selecting and appointing Special Fellows lacked full transparency; and letters of appointment of Special Fellows did not address important factors, such as agreed hours, copyright of written materials and other standard arrangements. Letter of appointment did not always include a clear description of the nature of the work to be performed. The UNITAR had also granted annual and sick leave to Fellows contrary to the terms and conditions set out in the letters of appointment.

The Board made recommendations to improve the disclosure of liabilities in the financial statements and to strengthen control over the procedures for selecting, appointment and remunerating Fellows.

According to the report on the Voluntary funds administered by the Office of the United Nations High Commissioner for Refugees (UNHCR)(document A/55/5/Add.5), non-expendable property disclosed in the notes to the financial statements did not include comprehensive inventory lists of UNHCR headquarters and its field offices. Accordingly, the historical costs disclosed did not reflect the full and accurate valuation of non-expendable property. Thirteen implementing partners had a total of some $8.2 million in long-outstanding advances. Eight of those implementing partners had not submitted the final sub-project monitoring reports, which delayed closure of the projects.

The requirement for implementing partners to submit audit certificates, although not fully complied with, reached the target of 70 per cent set by the administration, the report says. Decline in voluntary contributions from donor countries poses a liquidity risk for the UNHCR. There was inadequate segregation of functions in field offices to ensure checks and balances. The MINDER asset tracking system had failed to provide support to the effective tracking and decentralized management of UNHCR assets.

The Board recommended that the administration improve presentation of non- expendable property in the notes to the financial statements; ensure that the reconciliation of account balances between headquarters and field offices is regular; strengthen programme planning; and strictly adhere to the United Nations accounting standards.

The report of the Board of Auditors on the fund of the United Nations Environment Programme (UNEP) (document A/55/5/Add.6) shows that UNEP did not fully comply with the United Nations accounting standards, as it disclosed accounts receivable and accounts payable in net, instead of gross, terms. That led to an understatement of accounts receivable and accounts payable in the amount of $688,829 and $1.11 million, respectively. Expenditures in respect of 13 projects exceeded the approved commitments by some $3,01 million. The UNEP did not provide the United Nations Office at Nairobi with information needed to maintain a central roster of consultants, which should be the basis of their selection.

Also according to the report, 247 of the 557 projects implemented, with a total project cost of $296 million (46 per cent), were inactive. Eighty-four of them had been inactive prior to 1995. The Board was disappointed to note that there had been no improvement in the closure of inactive projects despite its prior recommendations. Terms of reference for the engagement of consultants did not include performance indicators, such as timelines, by which to assess or evaluate results.

The Board made recommendations for strict adherence to the United Nations accounting standards, enhancement of the existing accounting system, strengthening of the monitoring and reporting system used for projects and improvement in the procedure for hiring consultants.

Regarding the Auditors’ report on the United Nations Habitat and Human Settlements Foundation (document A/55/5/Add.8), the Board finds that the Foundation did not fully comply with the United Nations System Accounting Standards insofar as it disclosed accounts receivable and accounts payable in net, instead of gross, terms. This led to an understatement of accounts receivable and payable in the amount of about $294,264 and $248,501, respectively.

The report goes on to say that by May 2000, the Foundation had collected a high proportion of earmarked (99 per cent) and non-earmarked (95 per cent) pledges for the biennium 1998-1999. The Board also found, however, that expenditures exceeded allotment limits by a total of some $1.27 million in respect of 11 trust funds and by some $410,000 million in respect of three earmarked projects, indicating weak budgetary control and expenditure monitoring.

On the use of consultants, the report says that, in 12 out of 28 cases, the Foundation did not select consultants on a competitive basis contrary to the requirement of the comprehensive guidelines for the use of consultants.

Among the its recommendations to Habitat's administration, the Board recommends that it disclose accounts receivable and payable in gross terms rather than in net terms, in accordance with United Nations System Accounting Standards. It also recommends applying strict expenditure control over each trust fund and project to ensure that expenditures do not exceed authorized limits of allotment. The administration should also comply fully with the comprehensive guidelines for the use of consultants, as accepted by the General Assembly. It also recommends that the administration update the roster of consultants and provide it to the United Nations Office at Nairobi to facilitate the development of a computerized central roster of consultants.

Regarding the United Nations International Drug Control Programme (UNDCP) (document A/55/5/Add.9), the Board states that the UNDCP had not complied with the requirement of the United Nations accounting standards to disclose liabilities for end-of-service benefits, post-retirement benefits and annual leave. The programme’s financial position improved significantly during the biennium 1998- 1999, when it achieved a net excess of income over expenditure of $5.4 million, compared with a net excess of expenditure over income of $1.1 million in 1996- 1997. Disbursements of $14.2 million, incurred through the UNDP on nationally executed projects, were not supported by audit reports. There was insufficient evidence to allow the Board to form an audit opinion on that expenditure.

The UNDCP had neither followed up on nor received audit reports covering the $17.9 million incurred through the UNDP on nationally executed expenditures in 1996-1997. It had not reconciled its bank accounts properly for significant periods, with the result that two amounts totalling $825,000 were not brought to account until the Board carried out its audit. The UNDCP had also not cleared three advances totalling $345,000, one of which was made in 1993.

The report further says that the Programme’s procurement activities were undertaken by more than seven different agencies, and the UNDCP did not routinely prepare procurement plans, thereby precluding any advantage from economies of scale. A contract for a public awareness campaign was cancelled one month after the award when pledged funds failed to materialize. The UNDCP settled with the contractor in the amount of $235,000 (58 per cent of the contract value) for preparatory work, and the campaign was never completed.

The Board made recommendations to improve compliance with the United Nations accounting standards, to strengthen accountability and planning and to improve procurement practices and procedures.

According to the report on the United Nations Office for Project Services (UNOPS)(document A/55/5/Add.10), in 1998-1999, UNOPS delivered projects with a value of some $1.1 billion and generated fee income of $86.4 million. It also authorized $371 million in disbursements for projects funded by loans from the International Fund for Agricultural Development (IFAD), for which it received total fees of $9.9 million. The total recurrent and non-recurrent administrative expenditure of UNOPS of $106 million exceeded its total income of $101 million. That was mainly because, as foreseen by the Executive Board, UNOPS had to fund non-recurrent expenditure for the implementation of IMIS and relocation of headquarters offices.

The report further noted a lack of quantified measures of success in the project documents, although many of those had the potential to be quantified. The cost of the relocation of UNOPS headquarters considerably exceeded the estimate. The contract of UNOPS with the construction manager required it to pay the firm a management fee of 9.25 per cent of the total construction costs. Such an arrangement reduced the incentive for the managing consultants to control costs, since the contractor stood to make more money from higher overall expenditure.

The Board made recommendations to tighten financial management, improve business planning and strengthen project management.

The report of the Board of Auditors on the International Criminal Tribunal on Rwanda (document A/55/5/Add.11) also contains financial report on the Tribunal's accounts for the biennium 1998-1999 ended 31 December 1999. The accounts consist of four statements and related notes.

According to the report, at 31 December 1999, unpaid contributions to the International Criminal Tribunal for Rwanda totalled $13.4 million. The budget of the International Criminal Tribunal for Rwanda for the biennium 1998-1999 totalled $127.6 million, as appropriated by the General Assembly in its resolutions 52/218 and 53/213. Actual expenditures for the biennium totalled $124.6 million, leaving an unencumbered balance of $3 million. The 1998-1999 expenditure total of $124.6 million represented an increase of 91.7 per cent of the total expenditures in the biennium 1996-1997 of $65.0 million.

At the end of 1999, the accounts of the International Criminal Tribunal for Rwanda show a surplus of $6.3 million, which comprises an unobligated balance of appropriations of $3 million, savings on the liquidation of prior period obligations of $600,000, and miscellaneous income of $2.7 million for the biennium. The balance of $6.3 million will be available to offset against the assessments of Member States.

The Board of Auditors found that the International Criminal Tribunal for Rwanda delayed the submission of financial reports to United Nations Headquarters up to two months after the established deadlines. Similarly, there were delays in the submission of the consolidated accounts by United Nations Headquarters. In six cases, the International Criminal Tribunal for Rwanda used miscellaneous obligating documents to reserve credits totalling $7.66 million in the accounts for the purchase of goods and services contrary to established procedures.

The Board also found that despite the failure of the Office of the Prosecutor to account for an imprest amount of $30,000 at 1 January 1999, a further $100,000 was advanced, bringing the balance to $130,000 in October 1999. An additional amount of $34,070 was advanced to the Office in April 2000. Although the International Criminal Tribunal for Rwanda maintained a log of its vendors, the necessary information on the vendors was not available to confirm that they had met the registration criteria.

Also according to the report, the International Criminal Tribunal for Rwanda had not carried out the required periodic evaluation of the performance of vendors during the biennium ended 31 December 1999. Although the software of the procurement system was changed twice between August and December 1998, the International Criminal Tribunal for Rwanda did not provide adequate training to

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the staff of the section, which resulted in a gap in internal control caused by a lack of separation of duties. The appointed travel agent of the International Criminal Tribunal for Rwanda had neither paid $39,216 due to the Tribunal in respect of a rebate on international and domestic air transportation nor fulfilled any of the terms under a contract for the provision of travel agent services to the Tribunal.

The Board made recommendations to improve the submission of financial reports and consolidated accounts, to tighten control over the reservation of credits in the accounts for travel and the purchase of goods and services, to strengthen the imprest accounting of the Prosecutor’s Office and to tighten internal control over procurement and contract management.

Regarding the International Tribunal on the Former Yugoslavia (document A/55/5/Add.12), the report of the Board of Auditors states that, at 31 December 1999, unpaid contributions to the International Tribunal for the Former Yugoslavia totalled $18.6 million, and the budget for the biennium 1998-1999 totalled $171.7 million. Actual expenditures for the biennium totalled $151.4 million, leaving an unencumbered balance of $20.3 million. The 1998-1999 expenditure total of $151.4 million represented an increase of 107 per cent of the total expenditures in the biennium 1996-1997 of $73.2 million. Percentages of expenditure by functional category include 81.2 per cent for salaries and common staff costs, 4 per cent for travel, 0.7 per cent for contractual services, 8.6 per cent for operational expenses, and 5.5 per cent for acquisitions.

At the end of 1999, the accounts of the International Tribunal for the Former Yugoslavia show a surplus of $23.6 million, which comprises an unobligated balance of appropriations of $20.3 million, savings on the liquidation of prior period obligations of $1.3 million, and miscellaneous income and other adjustments of $2.0 million for the biennium. The balance of $23.6 million will be available to offset against the assessments of Member States.

Upon review of the Tribunal's operations, the Board of Auditors concluded that the Tribunal did not disclose in the financial statements the liabilities for end-of-service benefits, post retirement benefits and annual leave. As at 31 December 1999, after six years of operation and expenditure of $225 million, the Tribunal had convicted six accused, acquitted one and released seven. The Tribunal did not use its three courtrooms for 58 per cent of the available 1,614 sessions between July 1998 and August 1999. Between 1997 and 1999, defence expenditure increased by 364 per cent, from $3.3 million to $12 million, while prosecution costs increased by 100 per cent, from $12.5 million to $25 million.

The Board made recommendations to improve the disclosure of liabilities in the financial statements, improve the use of courtroom facilities and reduce defence costs.

The Committee also had before it a report of the Secretary-General on the implementation of the recommendations of the Board of Auditors (document A/55/80). The Secretary-General states that in response to the recommendations concerning deficiencies in hiring and performance evaluations of experts and consultants, new guidelines for their use were promulgated in August 1999. After discussion in the Fifth Committee during the first resumed session of the fifty-fourth session, the issue was deferred to the fifty-fifth session. Regarding the recommendation on a career development system, the report states that the Organization continues to invest in the development of staff, promoting a new culture of continuous learning. The mandatory staff development goal in the performance appraisal system provides an important source of input. A competency model was finalized in mid-1999, and a booklet entitled “United Nations Competencies for the Future” was issued. New programmes include competency-based interviewing and selection, work planning/coaching, creative problem-solving and decision-making, information technology for managers and a series of team-based workshops. A third phase of the People Management Programme will be introduced in the near future.

Entry-level Professional staff continues to receive particular attention, the report states. A career support programme that includes a managed reassignment for staff recruited through national competitive examinations or promoted through the G to P examinations was launched early in 2000. As part of the overall human resources management reform programme, proposals are being developed to ensure mobility within the United Nations.

Regarding other recommendations, the report states that for the period ended 30 June 1999, there were no over-expenditures at the section level, at which the General Assembly appropriates budgetary resources.

The integration of accounting systems with IMIS continues, and IMIS is being progressively implemented at offices away from Headquarters. It is to be completed by April 2001.

The Board also recommended that the administration modify Release 3 of IMIS to avoid substantial adjustments of accounts receivable and payable outside the System; provide detailed information about debtor/creditor identity in respect of each item of accounts receivable and accounts payable; and enable the Organization to actively pursue recovery, especially in long-outstanding accounts. In that connection, the new general ledger code was added for the After-Service Health Insurance (ASHI) in July 1998 and changes were made to the ASHI interface computer program. The accounts receivable/payable offset reports are being used for the closing of accounts at 31 December 1999. Receivable ageing reports and outstanding contributions-receivable ageing reports are being finalized in 2000.

The report also details actions concerning the Procurement Division, which recently began soliciting procurement plans for the following year from various offices and departments. In an effort to provide potential suppliers with adequate lead time, particularly in the area of peacekeeping missions, the Division has started to post requests for expression of interest for upcoming requirements on its Internet home page. It also provides potential suppliers with information on recent tenders and contract awards. These measures have virtually superseded open tendering in printed media, as a more effective means to reach out to potential suppliers.

Regarding a recommendation that users of common services should pay for them on a cost-apportioned basis, the report states that such a system has not been established to date. All common service activities developed since 1997 have been implemented through cooperative efforts between United Nations bodies without any incurred financial costs. However, given the wide range of activities and technical areas involved, it is foreseen that a variety of cost-apportionment systems would be developed.

Efforts have been made to improve communication and coordination between Headquarters and the United Nations Offices at Geneva and Vienna. Workload standards for conference-servicing functions have been applied equally at Headquarters and those offices. Output and productivity indicators and quality control mechanisms are in place at the three duty stations. To address concerns about delay in service delivery, the Department of General Assembly Affairs and Conference Services has tried to streamline its procedures. Further improvement is possible, however.

In response to yet another recommendation of the Board, the second performance report was provided for 1998-1999 projections, based on actual expenditure data for the first 20 months of the biennium. Actual expenditure recorded for that period at the closing of the accounts amounted to $2,487.8 million, compared to the projected amount of $2,488.3 million in the second performance report. Actions are being taken to ensure that supporting documents are provided with inter-office vouchers to offices away from Headquarters on a monthly basis. Significant improvement has been made in the processing and reconciliation of inter-office vouchers since 1997.

The report also contains information regarding the implementation of recommendations regarding the United Nations Office at Nairobi; the Economic Commission for Latin America and the Caribbean (ECLAC); individual recruitment case files in Vienna; recruitment of new personnel; and the introduction of the IMIS recruitment and appointment tracking system in Vienna and Geneva.

The second report on the matter (document A/55/80/Add. 1) contains responses of executive heads of various organizations and programmes of the United Nations system in response to General Assembly resolution 52/212 B of 31 March 1998, under the terms of which annual reports are to be submitted on the measures taken in implementation of the recommendations of the Board of Auditors.

The document transmits responses from the International Trade Centre UNCTAD/WTO, UNU, UNRWA, UNITAR, the Fund of UNEP, the UNFPA), the United Nations Habitat and Human Settlements Foundation, the Fund of the UNDCP and UNOPS. These responses relate to the recommendations of the Board of Auditors in its reports for the period ended 31 December 1997. The report covers only those activities that had been previously reported on a biennial basis. Those programmes for which reports of the Board of Auditors are already submitted annually are reported in an annex to the respective report of the Board of Auditors to the Assembly.

Also before the Committee was the report of the Secretary-General on the implementation of recommendations of the Board of Auditors on United Nations accounts (document A/55/380), as well as his report containing replies from United Nations funds and programmes indicating measures to be taken to implement the Board’s recommendations (document A/55/380/Add.1).

Also before the Committee was the note by the Secretary-General (document A/55/364), transmitting the concise summary of principal findings, conclusions and recommendations contained in the reports of the Board of Auditors to the General Assembly, which was requested by the General Assembly in its resolution 47/211. The Board of Auditors was invited to report in a consolidated fashion on major deficiencies in programme and financial management and cases of inappropriate or fraudulent use of resources together with the measures taken by United Nations organizations in this regard. The document contains findings relating to common themes in various bodies audited by the Board. The list of organizations reported on by the Board appears in annex I, and Annex II contains information on the status of implementation of recommendations for 31 December 1997.

The Board states that seven organizations (United Nations, UNU, UNHCR, UNEP, United Nations Centre for Human Settlements (Habitat) and UNDCP) had outstanding recommendations not fully implemented for one or more financial periods. Out of a total of 167 recommendations made about 16 organizations, 115 (69 per cent) had been fully implemented, 42 (25 per cent) were in progress and 10 (6 per cent) had not been implemented. As for the recommendations not fully implemented, the Board noted that in four cases, the recommendations had been overtaken by events. The Board would continue to monitor the implementation of its recommendations.

According to the document, the Board confirmed that organizations generally complied with the United Nations accounting standards for the biennium 1998-1999. However, further work was needed in that respect. The main issues warranting attention are: disclosure of accounts receivable and accounts payable in net rather than gross terms; non-provision for uncollectible pledges; non-disclosure of contingent liabilities, prior years' adjustments, reserves and fund balances; and liability for end-of-service benefits, post-retirement benefits and annual leave.

The report also contains information on financial issues, including qualified audit opinions; results of operations; liquidity position; treatment of programme expenditure; outstanding receivables and/or overpayments; and reconciliation of accounts. The information on management issues concerns procurement and procurement-related arbitration claims; programme management; IMIS; consultants; internal audit; non-expendable property; ICSC; and other issues.

The Board conducted a specific examination of practices and procedures with regard to the handling of arbitration cases by the United Nations Administration and made recommendations to improve contract preparation and approval and to establish clear segregation of functions to ensure the operation of sound internal checks. The Board's review of programme management revealed deficiencies in expenditure control, project overruns in time and budget, delays in closing projects and the need for more accurate and reliable data to be maintained on programme performance.

Regarding IMIS, the Board recommended that the administration, as a matter of priority, develop and implement a consolidated database to facilitate the preparation of financial statements and to reduce reliance on ad hoc reports; and to develop and archiving facility for the system. It also stressed the need to ensure that all adjustments in the preparation of financial statements are approved and supported by an audit trail.

Also according to the report, in reviewing internal audit procedures, the Board found that that there was room for improvement in the maintenance of audit working papers, in documenting internal control systems and in reviewing the work contracted out to audit firms. The Board was also provided with information on some 71 cases of fraud or presumed fraud involving a total of some $4.23 million that became known to eight organizations during 1998-1999. Of that amount, approximately $946,000 has been recovered. Disciplinary action in the form of summary dismissal was taken against some of the staff members, and other cases were still under investigation.

The Committee also had before it the related report of the ACABQ (document A/55/487) on the financial reports and audited financial statements and reports of the Board of Auditors. The ACABQ notes that it was the first time that separate audit reports on the International Criminal Tribunals for Rwanda and the Former Yugoslavia had been submitted. It notes that some progress has been made in implementing recommendations made by the Board in previous reports. The ACABQ requests that the process be monitored in terms of efficiency and capacity to produce clear and concise reports on time.

According to the report, the ACABQ holds the view that the administrations concerned should no longer be allowed to believe that qualified audit opinions are a normal feature of the audit function. Matters that led to a qualified audit opinion should be regarded as serious issues in the financial health of the audited United Nations entity. These matters warrant immediate appropriate attention and remedy on a priority basis. The ACABQ recommends that the General Assembly defer action on the financial statements of the UNDP, UNDCP and UNFPA for the period ending 31 December 1999, pending certification by the Board that the matter has been resolved or that satisfactory progress is being made towards removing the reasons for the qualified opinion. With regard to UNU, the Committee requests that the administration implement without further delay the Board’s recommendation, which was previously approved by the Assembly, that the financial statements for the University should include a provision for long-outstanding unpaid pledges in line with United Nations accounting standards.

The report goes on to say that wherever the Board of Auditors has qualified the financial statements and accounts of an audited administration, the Secretary- General should bring the matter to the attention of the respective governing body to allow that body to take the necessary measures in the context of accountability requirements in circumstances when the head of the administration fails to remedy the situation which gave rise to the qualified audit opinion. The ACABQ notes with concern a trend whereby some administrations now consider amending applicable regulations or rules to avoid implementing the recommendations of the Board.

On procurement activities, the report says that the ACABQ notes that procurement management in a number of funds and programmes has deteriorated. In view of the level of resources involved, the Advisory Committee requests that all affected administrations and, as appropriate, their governing bodies should address urgently the weaknesses identified in the respective reports of the Board of Auditors. The Advisory Committee welcomes the use of the Internet for procurement and recommends that this experience should be shared by all entities of the United Nations system, in particular its funds and programmes.

Concerning the issue of accountability of implementing partners, the report notes that weakness in accountability, particularly in relation to audit reports, persist in some funds and programmes and requests that corrective action be pursued to address the root causes of the weaknesses identified in the latest and previous reports of the Board and the ACABQ. This observation is especially relevant to the operations of UNICEF, UNDP and UNFPA. Noting a number of reference to write-offs and losses of cash, receivables and property, the ACABQ requests that the Board attempt to assess the reasons for such actions.

On the audit of the United Nations, the report also notes that the Board of Auditors include for the first time comments on the United Nations Fund for International Partnership (UNFIP). In this connection, the Advisory Committee takes note of several weaknesses concerning project implementation, management and reporting. Corrective measures identified by UNFPI appear rather vague, while the problems identified required urgent attention. The ACABQ also asks that the Secretary-General submit to it a progress report on the implementation of the Board’s recommendations resulting from the special audit on arbitration in the context of the Committee’s review of budgets of peacekeeping operations during February and March 2001. Detailed information on arbitration/claim cases, including the related costs and fees, should be provided to it on a regular basis in the context of the Fifth Committee’s consideration of budgets of peacekeeping operations for each new budget year.

The report goes on to say that the ACABQ is seriously concerned that the Board has once again qualified its opinion on the financial statements of the UNDP because it was unable to obtain sufficient audit evidence, in the form of audit reports from executing agencies and governments, that funds advanced to them for national execution projects had been expended for the purposes included. The Advisory Committee points out that the Board qualified its opinion on the financial statements and accounts of UNDP for the last three bienniums. It recommends that the General Assembly defer action on the financial statements and accounts of UNDP pending satisfactory measures by UNDP administration.

With regard to the change management initiative launched by UNDP in 1997, the Advisory Committee notes that the cost of the initiative, which was formally closed in 1999, was estimate by UNDP at $18.1 million. This estimate is not complete, however, and the Board was unable to determine the full costs of the initiative. The Advisory Committee was provided with a summary of costs of the UNDP 2001 initiative, as prepared by the UNDP Budget Office. The ACABQ believes that there are lessons to be learned from this experience, in particular from the process of designing and planning projects and estimating costs.

Regarding UNFPA, the ACABQ notes with concern that the Board has qualified its opinion on the UNFPA financial statements owing to lack of receipt of audit certificates from governments and non-governmental executing and implementing agencies for programme expenditure totalling some $98.3 million. The ACABQ shares the Board’s concern with regard to the audit coverage of programme expenditure whereby UNFPA has no direct evidence to support half of its 1998-1999 national and non-governmental organization expenditure. The high risk inherent in this type of activity warrants sustained and effective monitoring by the Fund administration. There is no evidence that that had been done. The ACABQ recommends that the Assembly defer action on the financial statements and accounts of UNFPA for the period ended 31 December 1999, pending satisfactory measures by the administration of the Fund.

Regarding UNICEF, the report says that the Advisory Committee trusts that cash assistance to Governments will be subject to regular audit and reporting both by internal and external auditors. It recommends that the Board, in the next audit, ascertain the extent to which the various controls, reporting and certification functions are being adequately performed.

On the Fund of the UNDCP, the ACABQ notes again that the Board qualified its opinion on the financial statements and accounts of the programme owing to lack of audit reports for $14.2 million incurred on nationally executive projects during the period 1998-1999. The ACABQ is also concerned that the UNDCP has also not received audit reports covering the $17.9 million incurred through the UNDP on nationally executed expenditure in 1996-1997. The Advisory Committee, therefore, recommends that the Assembly defer action on the financial statements and accounts pending satisfactory measures by the administration of the UNDCP.

On the United Nations University, the ACABQ regrets that the University has not complied with the Board’s recommendations and notes that there is no information from the administration on the reasons for non-compliance. The ACABQ considers that non-compliance by the administration of the University does not, at the current stage, warrant a recommendation of deferral of approval of the financial statements and accounts. Rather, it recommends that the financial statements and accounts of the University be approved and that the administration should implement the recommendations of the Board.

Also, the report says that on voluntary funds administered by the United Nations High Commissioner for Refugees, in view of the resource constraints being experienced by the UNHCR, the ACABQ trusts that greater efforts will be made to plan and implement UNHCR activities more efficiently and exercise greater financial control over agency funds. It should take urgent steps to address weakness identify by the Board in its report.

Finally, regarding UNITAR, the ACABQ notes that the number of fellows has increased by some 34 per cent and that the cost had risen by about 59.5 per cent. Unless this increase corresponds to an increase in workload resulting from a larger income for the Institute, that might exacerbate the financial situation of the Institute.

Introduction of Reports

Presenting the 16 reports before the Committee, JOHN BOURN, Chairman of the Board of Auditors, said that, for the first time, separate reports had been prepared on the International Tribunals for Rwanda and former Yugoslavia. The purpose of external audit was to see that financial regulations had been followed. Another task was to make recommendations about good management and effective discharge of the United Nations. The Board completed most of its audits by the planned date of 30 June 2000, but there had been delays in the submission of financial statements by some organizations. Despite those delays, however, the Board had managed to complete its audit work and issue the signed Audit Opinions and reports by 28 July 2000.

He said the Board had had to qualify its audit opinions on the financial statements of four organization: UNDP, UNFPA, UNDCP, and the United Nations University (UNU). In that connection, he noted that the ACABQ, in its report A/55/487, had recommended the General Assembly defer action on the financial statements of the UNDP, UNDCP and the UNFPA, pending certification by the Board that the questions had been resolved or that satisfactory progress was being made towards removing the reasons for the qualified opinion. The Board welcomed that recommendation.

Overall progress made by organizations in implementing previous recommendations of the Board had been good, he said. He then highlighted some of the key findings in the main reports, including the fact that in the United Nations, IMIS Release 3 had not yet been fully developed to enable the consolidated financial statements to be prepared on the basis of a consolidated database. In four procurement-related arbitration cases, the United Nations had been judged liable to pay compensation in a total amount of $12.2 million to contractors due mainly to deficiencies in contract formulation, interpretation and implementation. In the UNHCR, a decline in voluntary contributions from donor countries posed a liquidity risk for the organization. In UNRWA, the value of land and buildings had not been capitalized and was not included in the statement of assets and liabilities and fund balances as at 31 December 1999. The Board had decided not to qualify its audit opinion pending the outcome of the revision of UNRWA’s financial regulations.

In the UNFPA, in addition to the reasons for the qualified audit opinion, the Board had found that regular resources expenditure of $575.9 million exceeded income by some $51 million, he said. As a result, the level of that body’s operational reserve had fallen during 1998-1999 from $63 million to $24 million. The Board also noted that the ACABQ had strongly disagreed with the UNFPA on its intention to amend the rules governing the audit reports of executing agencies. The Board agreed with the ACABQ that this change would make the situation worse, as larger expenditures could be incurred without supporting audit reports.

C.S.M. MSELLE, Chairman of the ACABQ, introduced the reports of that body. Usually, the reports of the Board were published before the beginning of the regular session and taken up early in the work of the Fifth Committee. Late issuance of the reports should not become a regular practice, he said. The ACABQ’s review had been somewhat limited by the late submission of some of the reports.

He said that one of the recommendations of the ACABQ related to the need to defer action by the General Assembly, pending resolution of the issues which had led to qualified opinions by the Board on the UNDP, UNDCP and the UNFPA. Regarding the UNU, the Advisory Committee had concluded that reasons for qualification of financial statements and accounts, although regrettable, did not warrant deferral of the approval of financial statements. However, it recommended that the University fully comply with the recommendations of the Board.

There were also concerns about changes in the financial regulations of UNICEF, he continued. Another example of an attempt to amend a rule concerned the UNFPA, and that had also been reflected in the report of the Advisory Committee, which strongly disagreed with that intention. Specific examination of practices and procedures of handling arbitration claims by the United Nations had been requested. The Advisory Committee had stressed the importance of full implementation of the Board’s recommendations.

Statements

CELINE CERVI (France), speaking on behalf of the European Union and associated States, said that every two years Member States focused on the financial management of the United Nations system. The detailed reports of the Board of Auditors were essential to informing countries about the use of their contributions. External audits were very important, and the financial rules of the Organization should be strictly followed.

It was necessary to underline the progress that had been achieved, she continued. About 95 per cent of the Board’s recommendations had been implemented, or were being implemented. That was an encouraging sign. It was necessary to put an end to the remaining deviations as soon as possible. However, the Union was concerned that reservations had been expressed in connection with four agencies. Some of the expenditures by the UNDP, UNDCP and the UNFPA had not been justified, and that was unacceptable. The recommendation to defer action on those bodies should be supported.

Expenditures of UNICEF, UNFPA and UNRWA had exceeded their receipts, she said. No expenditure should be made by United Nations bodies without previously receiving contributions. Reconciliation of bank accounts of United Nations bodies was needed to assure financial control. There was concern over the increasing trend to modify financial rules and make audit reports more flexible, and the Union disapproved of such practices. Complete financial reports should be submitted within expected time limits.

She went on to say that the Union agreed with the Board regarding procurement and contracts with commercial bodies. Many problems had been identified by the Board, including insufficient internal oversight and low levels of use of supplier database. Respect for rules of procurement should be enforced. The use of IMIS remained very limited, and she called for the establishment, on a priority basis, of a global database, which would facilitate presentation and verification of consolidated financial reports. On programme delivery, she said that delays at the beginning and closure of projects continued. They would disappear if all United Nations bodies had reliable indicators of results, which would ensure accountability of programme managers.

JOHN ORR (Canada) said that Canada would make a prepared statement on Wednesday. He hoped to receive a formal explanation as to why financial statements had only been available this morning.

JEAN-PIERRE HALBWACHS, the United Nations Controller, said that he was not able to answer on the delay of the financial statements. He would have to get back to the Committee with that information.

Mr. BOURN, Chairman of the Board of Auditors, said that he would deal in detail with comments at later date, but wished to thank the European Union for its expressions of support.

The Committee then turned its attention to its continuing discussions of the review of the efficiency of the administrative and financial functioning of the United Nations and human resources management

MICHELLE ANTOINETTE MARSTON (Jamaica) said that it was important for delegations to maintain an overriding concern about the best interest of all staff. On recruitment, placement and promotion, Jamaica was concerned that the Organization was still working towards the goal of 120 days for the recruitment period. She supported staff mobility and felt that equal attention must be paid to the issue of upward mobility. On the issue of the G to P examination, Jamaica was committed to the concept of equitable geographical representation and supported the holding of national competitive exams, but the G to P was designed for movements of staff from the General Service to Professional categories and constituted the one and only means of promotion and facilitated the growth of staff at all levels. There were only 23 posts this year. There was no reason why staff should be restricted from competing for such a small number of vacancies.

On the improvement of the status of women in the Secretariat, the goal of 50-50 gender balance must continue to be worked towards, she said. The Organization must continue to identify qualified female candidates.

RAFIAH SALIM, Assistant Secretary-General for Human Resources Management, said that the work accomplished to date was the result of the combined effort of many people, not just within the Office of Human Resources Management (OHRM), but throughout the Secretariat and associated programmes. Results would not have been possible if the Office had not had the direct and personal support of the Secretary-General, the Deputy Secretary-General and the Under-Secretary-General for Management. As the Secretary-General’s report explained, the Office had not undertaken the project in a vacuum, but in consultation with staff representatives and the entire staff, including staff of some of the peacekeeping missions. The level of consultation was unprecedented in the United Nations.

She said that if the Secretary-General’s vision was to be met, as well as the mandates of the Member States, the Organization could not continue with business as usual for another biennium. The Secretary-General had started to initiate changes and reforms and he would continue to do so. But he asked for the Committee’s advice, assistance and support. Regarding the issue of equitable geographical representation, the number of unrepresented Member States had been reduced over the past four years from 25 to almost 20 per cent. Four new members joined the United Nations during the period. Also, the number of under- represented Member States had also been reduced from 20 to eight, a 60 per cent decrease. The Secretary-General was determined to continue his efforts to ensure full and equitable geographical representation of all Member States. He had made equitable geographical distribution an important component of his performance management plan with all programme managers.

With regard to requests for additional details concerning contractual mechanisms, she looked forward to a frank exchange of views on the matter. The reason the Secretary-General did not make a specific recommendation was that he wished to hold further discussions with staff and to hear the views of Member States. On the issue of accountability –- particularly management accountability –- each of the building blocks of human resources management reform were developed with a view to ensuring the provision of appropriate mechanisms of accountability. However, accountability must be looked at in the broader context of overall reform. The performance management plan between the Secretary-General and the heads of Departments and Offices was the ultimate performance appraisal system, and it was now accompanied by a report card on performance on an annual basis. The proposed Accountability Panel, chaired by the Deputy Secretary-General, would provide an internal review of the various oversight reports to ensure that the Organization was making maximum use of advice provided by various bodies. Accountability mechanisms were intended to supplement existing procedures, which addressed fraud, gross negligence and other disciplinary matters.

Never before had such concrete mechanisms of accountability been developed and implemented, she continued. Specific tools had been put in place to ensure compliance with the Committee’s mandates and governance. In response to a question on who was accountable for the promotion of staff through the G to P examination, she said that she was the official who should be held responsible and accountable for that decision. She recalled that the 1999 examination was held in February 1999 prior to the adoption of resolution 53/221, which was adopted in April 1999. Following the passage of that resolution, the Secretary-General, acting in his capacity of chief administration officer, came back to the Member States with his views on the implications of the specific provisions within the resolution on the application of equitable geographical representation as a criteria for taking the G to P exam. After consulting the Legal Counsel, when announcing the next G to P exam in July 1999, the Office informed all staff that pending a final decision by the Assembly, qualified candidates would be allowed to take the exam, but that the results, including the marking of exam papers of staff from over-represented countries, would be subject to the outcome of the review of the issue by the Assembly. However, during the last session of the Assembly, the Committee could not reach agreement on the issue. Faced with the dilemma of having no final decision from the Assembly, she consulted the Office of Legal Affairs. Following its advice, she decided to proceed with the marking of all examinations. For 2001, she had decided, and informed staff, that no G to P examination would be held until such time as a final decision had been taken by the Assembly.

On concerns expressed in regard to the internal system of justice, a comprehensive system of justice in the United Nations Secretariat already existed, she said. The timeliness of the process could be improved and the possibilities for informal mediation prior to litigation could certainly be expanded. Plans had been made to create a position of ombudsman for the purposes of mediating staff complaints prior to formal litigation. The Secretary-General was proposing the strengthening of the administrative law unit and proposing to provide legal backstopping to the panel of counsel. The Secretary-General would convene a working group to review the entire system of justice, with broad representation from Headquarters, the regional commissions and the field. That group would first meet on 27 November.

She said that, in the era of globalization, the distinction between private industry, internal organizations, public service entities and non-governmental organizations was becoming blurred. A major international private business entity headquartered in New York admitted to her last week that they had an ombudsman programme within their organization to assist in the informal handling of disputes. They had modelled that programme, not on the private sector, but on the work done at the World Bank. Information and best practices did not travel on a “one-way” street. As the Organization was competing for staff with the private sector, and if the Organization was to meet the ideals of the Charter and to attract the best and the brightest, it could not have human resources policies and practices which ignored good management. The best and brightest would not stay with the United Nations if they saw it as a slow moving bureaucracy which was unable to be responsive to their personal and professional needs.

Inspector FATIH BOUAYAD-AGHA of the Joint Inspection Unit (JIU), said that in her statement, Ms. Salim had not made any reference to the report of the JIU before the Committee. Little progress had been made in the administration of justice at the United Nations. He was also looking forward to her comments on the statement in the Secretary-General’s note transmitting the JIU report, which said that acceptance of the Inspectors’ recommendation on the United Nations Administrative Tribunal would restrict the Secretary-General’s authority as the highest official. The Tribunal should be able to make recommendations regarding rescinding of a contested decision and decide on the appropriate amount of compensation to be paid. Since the Tribunal consisted of judges approved by the General Assembly, it would not deal lightly with the matters before it. Authority of the Secretary-General would be further strengthened if the Tribunal could deal with cases effectively.

KIRILL V. FEDOROV (Russian Federation) thanked Ms. Salim for her statement. However, he repeated his request for information regarding transfer from the General Service to the Professional category within the Secretariat since February 1999. At the last session, the Committee had heard the same explanations as to why some staff were transferred from G to P, although no decision had been taken by the General Assembly on that matter. Those who had previously sat the exam were told that their papers would not be marked, subject to the outcome of the review of the issue by the Assembly. Nevertheless, the work was checked, and people were hired in violation of the General Assembly resolution. He considered such a transfer to be a violation of resolution 53/221, adopted in April of 1999. So far, his delegation had been told that in 2001 the work of those taking the exam would not be checked. That meant that this year people had been hired following the exam. He profoundly regretted that the Secretariat was not paying any attention to the General Assembly resolution. He also wanted to know when the report of the JIU on senior officials would be considered.

ABDOU AL-MOULA NAKKARI (Syria) said that replies by Ms. Salim had covered part of the requests from delegates. However, it was necessary to undertake a comprehensive discussion of some issues. Commenting on some of the points made by Ms. Salim, he said that she had stated that staff opinions had been incorporated into reports by the OHRM. However, staff had registered reservations on the proposed system of contractual arrangements.

The Secretariat had not given sufficient justification for the recommendation about setting aside the previous contract system (permanent and temporary). The concept was well enshrined in resolution 53/221, and that was what the General Assembly had requested. Attempts to replace the permanent contracts by continuing ones meant that the administration could end such contracts at any time. In staff reports, the staff had expressed concern about such a system. Noting that the Secretary-General’s report stated that the three types of contract were a mere proposal to be discussed, which Ms. Salim had reiterated today, he said that he would like to come back to that issue at a later stage.

As for G to P examinations, he noted the reduction in the number of unrepresented States. Now, it would be appropriate to fill the gap by using national competitive exams not just for unrepresented, but also for under- represented, countries. Currently, such exams were held only for unrepresented States, as far as he understood.

Turning to the question of accountability, he recalled that resolution 53/221 addressed the link between the concepts of delegation of authority and accountability. Delegation of authority could not be undertaken before a system of accountability had been set up. Accountability should also concern senior managers. Reports before the Committee did not provide for a comprehensive system of accountability, however. Accountability of management had also been set aside, and that was a serious threat. Accountability of managers must be ensured, and the system of accountability must be a major guideline for future work.

He expressed surprise at Ms. Salim’s comments on the G to P promotion. During the last session, an exception to resolution on human resources had been requested by the Secretary-General, and the Assembly had been unable to reach a decision in that regard. Now, Ms. Salim had told the Committee that the Office of Legal Affairs had been consulted on the matter, without saying what the recommendation of the Legal Counsel was. Such decisions should be made by the General Assembly.

For the Secretariat to act on an administrative decision before an Assembly decision had been taken on the G to P exams would be a premeditated intent by the Secretariat to overstep the legislative authority of the General Assembly. When it came to the similarities with the private sector, he wanted to remind the Committee that the United Nations was an international organization with its own exceptional purposes. It was also ironic that the Organization called on Member States to abide by international legislation on worker rights without using the same concepts itself. It was time for the Organization to adopt the same measures for its own staff.

AYMAN M. ELGAMMAL (Egypt) said that he was dismayed and surprised at Assistant Secretary-General Salim’s last comment on the G to P competitive exam. Egypt had expressed its position on that situation during the last General Assembly session. The actions undertaken since then were in violation of General Assembly resolution 53/221. It had been clearly stated in the Assembly that until another resolution was passed, staff members could not be appointed following the G to P examination in violation of the equitable geographical distribution system.

He was surprised that Ms. Salim had consulted the Legal Counsel and had taken a decision to violate the guidelines given to her by the General Assembly, he said. Egypt totally rejected that interpretation and hoped that the Secretariat would abide by resolutions and decisions of the Assembly.

ALVARO JARA (Chile) said that Ms. Salim had said that in 2001 it had been decided that there would be no G to P exam, pending a decision taken by the General Assembly. He did not understand the explanation. An opinion of the General Assembly had been requested but until it submitted its opinion, the process should proceed normally. For 2001, the process would not proceed normally.

EVA SILOT BRAVO (Cuba) said that, as a matter of principle, she supported all proposals directed towards promoting improvement in the conditions of staff. On the question of mobility, Cuba felt that while mobility should be promoted as a sound practice, it should not become a condition for staff to be promoted, which might affect career prospects for some staff. Also, there should be a distinction between mobility between departments and duty stations. They could not be viewed in the same context.

Regarding contractual and recruitment issues, she appreciated that ideas were being explored, she said. It was good that the process of change did not happen too quickly. Cuba was open to in-depth exchanges on issue. Decisions should not be taken without that process. While Cuba understood that efforts had been made to improve the administration of justice, to say that it was an integrated system was not a true reflection of reality. The JIU report should be used as a basis to think, in greater depth, about the whole system.

The Secretariat had provided assurances that geographical distribution was improving, she said; however, she did not see that in terms of numbers. The issue needed to be considered in context of profound changes that United Nations had experienced. It related to a whole system that was new. A management system was being introduced, in which programme managers were given leeway to make large numbers of decisions. She wondered whether programme managers were prepared for that kind of system. Substantive changes were being imposed, which could affect the observance of the principle of equitable geographical distribution.

Cuba believed that the decision taken by the General Assembly on the G to P exam was still valid, she said. It was not good practice to disregard that decision. The issue was not closed following resolution 53/221, she said, and another decision was required, but until that time, the General Assembly decision should be respected.

Mr. FEDOROV (Russian Federation) said that he wanted to make an important clarification. If no other resolution had been adopted, then resolution 53/221 remained in force, and no decision by the Office of Legal Affairs was valid. He also reiterated his request for information regarding the number of people advanced from G to P, with a breakdown by country. Another request was to cancel the results of G to P exams, for they contradicted the relevant Assembly decisions.

ABDELMALEK BOUHEDDOU (Algeria) also wanted to hear the Secretariat’s comments on the recommendation of the JIU regarding the creation of a post of ombudsman. He inquired to what extent creation of such a position would contribute to the mediation of conflicts and save time, and whether such a post would generate savings for the Organization?

KHALIFA O. ALATRASH (Libya) said that in the light of Ms. Salim’s comments, he wanted to say that while consultations with staff had been carried out, there was no agreement on the proposals of the Secretary-General as they had been formulated. The staff had criticized the suggestions. However, in Ms. Salim’s comments there was no indication of the staff’s concerns being taken into consideration. The United Nations should take into consideration the experience of the private sector when it did not contradict the Charter, but that experience should not be automatically transferred to the Organization, which had its own unique mandate. It was ironic that the United Nations was asking Member States to implement the guidelines of the International Labour Organization (ILO) without implementing them itself.

He asked what benefit the Organization was going to get as a result of the reform. He was concerned that the Secretary-General had already started to carry out some of the changes. Also, the principle of the results-based budget should not be implemented until it had been approved by the Assembly. It would be better to start a pilot project and test its results, before implementing a large-scale project which could turn out to be harmful in the long run.

Responding to comments from the floor, Assistant Secretary-General for Human Resources Management RAFIAH SALIM said that the different interpretations of the G to P issue were the reason she had had to seek the opinion of the Legal Counsel. For the information of the Committee, only 16 staff members had been successful in the 1999 G to P examination hold in February 1999, which had taken place before the adoption of the General Assembly resolution. As for the recommendation of the JIU, she wanted to emphasize that the Secretary-General took it very seriously. However, she would not feel right commenting on it now, as the Secretary-General had decided to convene a working group on the issue. The report of the JIU would be one of the sources on which that group’s work would be based.

The reform on human resources was not about commercial gains and profit- making, she said. It was just an effort to make both managers and staff more responsible and better-trained. When she took her job, she understood that human resources reform was about improvement of the management of the United Nations.

The JIU Inspector, Mr. BOUAYAO-AGHA, said that recommendation on the ombudsman post was ultimately upheld following lengthy consideration by the administration, and he was pleased by that decision. The proposal had also been recommended by the ACABQ. The post was aimed at strengthening the process of informal mediation. It should be an independent person, appointed by the Secretary-General.

Mr. NAKKARI (Syria) stressed that reform must be guided by criteria formulated by the General Assembly in resolution 53/221. The staff of the United Nations were invaluable, and programmes could not be implemented without them. That explained the importance he attached to the well-being of staff. His comments were made in the light of the responses made by Ms. Salim in her first round. For the administration of justice, Ms. Salim had said that the system was comprehensive. As for the G to P and competitive exams, he wanted Ms. Salim to provide them with written responses to all requests made by delegations, particularly on the dates for such examinations, the nationalities of those who succeeded, and the opinion of the Legal Office. She had used an opinion from the Legal Office. He wanted to know what answer Legal Affairs had provided her. He also wanted to know what the reason was for the delay in the issuance of documents that reflected the opinion of staff. That delay deprived many Member States of the opportunity to know before hand the opinions of staff. He had not yet received an answer to his question on the accountability of managers.

ABDALLA K. ABDALLA (Libya) said that he had been expecting Ms. Salim to reply to his questions, for the simple reason that he represented a Member State of the Organization. He was obliged to look into the work of the United Nations and comment on it. His comments might not be to the liking of the administration or the Secretariat, but the Secretariat was obliged to provide answers to any questions raised by a Member State. Questions from Member States were being ignored. Maybe this was because the Secretariat felt above the authority of a Member State. He had asked about consultations with staff, and whether staff ideas had fallen on deaf ears.

He said that the ombudsman system was a good system, created in Denmark for situations in which administration had become so complicated that the average man could not access management. That was the concept of the ombudsman, not the concept of someone who would authenticate the actions of any office. He would follow up on the issue and if the Committee did not get answers, it would be difficult to reach consensus. The ideals of the Charter, to attract the best and brightest, meant the United Nations must not have human resources policies which ignored good management. He asked why the best were trying to find their way out of the United Nations. Perhaps, he suggested, it was because they thought that it was going down the drain. That was the sentiment being heard in the corridors. He asked what was wrong with the current system using an appointment and promotion panel. It was working well. That panel was the eyes and ears of the staff. A new system aimed at authenticating actions of the administration would not be right. If authority were given to programme managers, how would their time be spent? How would that be compensated for? Their work would then be focused on details. Did they need additional personnel for that? He was looking forward to serious engagement on that question.

Assistant Secretary-General SALIM then said that she had never dreamed of not responding to comments from Member States. However, some issues were beyond her control, and she would not be able to respond to them. For example, she could only try to find out why some reports had been distributed late to the Committee.

The private sector was learning from the world body on the ombudsman, she continued, and that was what she meant -– not vice versa. Learning was a two-way street: the United Nations could learn from the private sector, and the private sector could learn from the United Nations. She would comment on the other issues in informal consultations.

Mr. ABDALLA (Libya) said that he wanted answers in an open meeting. He had asked substantive questions, and he wanted the answers to be recorded.

Acting Chairman of the Committee COLLEN VIXEN KELAPILE (Botswana) said that those questions would be addressed in a formal meeting tomorrow. For that reason, the general debate on human resources management would not be closed today.

The Committee then turned its attention to its agenda item on programme planning.

Speaking on behalf of the “Group of 77” developing countries and China, CHUKWUNONYE C. UDEGBUNAM (Nigeria) said that during the previous two years, the Regulations and Rules Governing Programme Planning had been reviewed, resulting in the introduction of the main elements associated with the implementation of results-based budgeting system. All proposals associated with such budgeting should be considered in a transparent and coherent manner. To that end, he requested the Secretary-General to present an updated and integral document, which would clearly identify all elements associated with that process and all related proposals contained in other documents under Programme Planning. The Group regretted that, in promulgating the revised text of the Rules and Regulations, the Secretariat had ignored some of the decisions of the General Assembly in its resolutions 53/207 and 54/236. That was a contravention of the prerogative of the Member States in the legislative process. In that regard, he asked the Secretary- General to publish a corrigendum to the document in which all decisions of the Assembly on those resolutions would be fully reflected.

Noting the changed format of the medium-term plan for 2002-2005, he said that the justification and impact of those changes in many cases needed further consideration, based on the information to be provided to the General Assembly on the relationship between the objectives and the mandates in the new format; and the selective inclusion of some mandates pertinent to the programmes in the objectives, expected accomplishments and performance indicators proposed for several programmes. It was also necessary to further clarify the lack of identification of the role of external factors in the implementation of some programmes, in particular those of a political nature, and the lack of comprehensive information about the impact of the new format of the plan on the rest of the cycle of budgeting, evaluation and monitoring.

He stressed the importance of setting priorities within the medium-term plan, and said that the concepts of expected accomplishments, outputs, objectives and activities were not exclusively related to, and should not be confused with, the concept of results-based budgeting. The General Assembly had not yet approved the proposal of the Secretary-General on results-based budgeting and, according to the relevant rules and regulations, indicators of achievement should be included in the medium-term plan only where it was possible to do so. Also, the Group considered that the report of the Secretary-General on the impact of the structure of the medium-term plan for the rest of the cycle (document A/C.5/55/14) was insufficient, particularly as far as the impact of the new structure on the evaluation, monitoring and budgeting cycle, and on ways of implementing the new methodology, was concerned. He requested the Secretary-General to present a new report addressing those concerns.

It was important that the whole process of programme planning was made effective and functional, he said. He welcomed the report of the Committee for Programme and Coordination (CPC) regarding the medium-term plan (document A/55/16) and said that the Group of 77 was ready to go along with its recommendations. However, programme 19 on human rights needed to be seriously reviewed, with the hope that a consensus agreement would be reached to begin implementation of the new medium-term plan at the beginning of the year 2002. He stressed the importance of having an agreed set of recommendations for programme 19, suggesting that the Assembly’s Third Committee (Social, Humanitarian and Cultural) should be requested to put in additional efforts to that end. If a consensus could not be reached, there may be no option but to re-adopt the text of the human rights section from the previous medium-term plan. In conclusion, he said that the phenomena of globalization had been categorized as presenting the single most important set of challenges facing the United Nations today. However, the medium- term plan had not been able to offer clear solutions to the challenges of globalization.

Ms. SILOT BRAVO (Cuba) asked why the list of documents to be considered under programme planning was incomplete, since only some reports were identified. While she understood that the CPC report dealt with all the reports, the Fifth Committee should also have all those reports available to it. Regarding the medium-term plan, she noted that a new format had been proposed. Compared to the previous one, it was much more concise. A number of activities carried out had been dispensed with. In the debate on each of the programmes, it was clear that a number of programme managers were not familiar with the role of elements in the programmes under their responsibility. Identification of expected accomplishments without making proper distinctions could create major differences between programmes. As a result, some programmes were more able to show results than other. She believed that use of such elements should be flexible and should be used in such a way as to not prejudge the importance of programmes. Cuba felt that the report submitted in document A/C.5/55/14 was insufficient, because it did not provide clarification about concerns raised previously. She hoped that the Assembly would be able to have more complete and exhaustive information on those questions. It would help it to have a clearer idea about the consequences of proposals.

Regarding the content of various sections, she noted that the trend to introduce conceptualizations and proposals which had no legislative mandate was continuing. She reiterated her position that the Secretariat should respect the medium-term plan as a policy directive for translating proposals. She said that the section on human rights was illustrative. She hoped that, with cooperation of all concerned, the Assembly would be able to take a decision on that programme. Cuba had actively participated in previous years in the revisions made to the rules on programme planning, both in the CPC and the Fifth Committee. She hoped that the Secretariat would issue a corrigendum to the regulations to reflect decisions adopted by the Assembly. Cuba was not opposed to the introduction of new proposals if they were in accordance with international intergovernmental standards.

BALI MONIAGA (Indonesia) said that the United Nations was facing a serious challenge in its effort to foster an enabling international environment for development. The great challenge was to ensure that globalization was harnessed in the service of development and the eradication of poverty. The Organization, through its programmes and activities, should be in a better position to develop and strengthen common understanding. Effective planning should be given premium attention, so as to ensure an integrated approach by the different inter- governmental bodies. There was a strong need to reflect gender sensitivity when designing and implementing programmes, projects and activities. The role of the United Nations in the promotion of international cooperation for development should also be strengthened.

Regarding the medium-term plan, he said that a number of expected accomplishments and indicators of achievement needed to be further improved. It was important to ensure that the entire process of programme planning was made both effective and functional. He attached great importance to the need for priority-setting within the medium-term plan. While recognizing the growing demands of peacekeeping activities, he believed that the Organization should maintain more balanced attention among development activities.

Speaking on behalf of the Rio Group, GUSTAVO PAREDES (Colombia) said that the Group attached great importance to programme planning. The medium-term plan determined the overall vision and capacity of the United Nations. It was the

principal policy directive of the Organization. He approved the fact that consensus recommendations had been submitted on 24 programmes of the 25, and he supported the recommendations in that regard. The exception was programme 19 on human rights, which did not have a consensus. He appealed to the Fifth Committee to submit consensus recommendations on that programme. Otherwise, it would be necessary to consider turning to previous recommendations. Turning to the changed format of the medium-term plan, he expressed satisfaction at the inclusion of expected accomplishments, outputs, objectives and activities in the revised format of the plan.

HAILE SELASSIE GETACHEW (Ethiopia) supported the position of the Group of 77 and China and said that Ethiopia gave considerable attention to one aspect of the proposed medium-term plan. In programme 9 -– trade and development -– his delegation fully concurred with the CPC’s recommendation contained in paragraph 121 of its report on the inclusion of a paragraph concerning the focal role of the United Nations Conference on Trade and Development (UNCTAD) with regard to work concerning least developed countries, small island developing States and land- locked developing countries. To that end, he would like to underscore the fact that the office of the Special Coordination for those States within UNCTAD suffered from a chronic shortage of human and financial resources. It was necessary to enhance its capacity to live up to its responsibility of monitoring and implementing the activities detailed in the relevant section of the medium- term plan.

NIKOLAI V. LOZINSKI (Russian Federation) said that the medium-term plan was the Organization’s main strategic document based on the mandates of legislative bodies. He supported efforts to make it a more efficient instrument to achieve the goals of the United Nations. If the planning system functioned unsatisfactorily, planning would not serve as a useful basis for establishing programme budgets. The present system of programme planning needed improvement, as did the medium-term plan. He welcomed the new format and hoped it would promote better qualitative assessment of programmes. The new format should become a strategic document and should not serve as an obstacle to new priorities, nor be turned into a means of maintaining obsolete functions.

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