PROPOSED BUDGET METHODOLOGY SHOULD NOT BE TOOL TO REDUCE UN’S RESOURCES, FIFTH COMMITTEE TOLD

Press Release
GA/AB/3409

PROPOSED BUDGET METHODOLOGY SHOULD NOT BE TOOL TO REDUCE UN’S RESOURCES, FIFTH COMMITTEE TOLD

In a multilateral organization, expected accomplishments and indicators of achievement could not fully justify the resource requirements, the Fifth Committee (Administrative and Budgetary) was told this morning as it continued its consideration of results-based budgeting. That was particularly true in the case of programmes for which expected accomplishments were difficult, if not impossible, to quantify.

Speaking on behalf of the “Group of 77” developing countries and China, the representative of Nigeria further added that results-based budgeting should not be conceived of as a tool to reduce the Organization’s human or financial resources, and any changes to the budget methodology should be made with prior endorsement of the General Assembly. Without a foolproof system of accountability and oversight, enhanced delegation of authority to programme managers might not result in efficient programme delivery.

Recommending careful evaluation of the proposed format prior to its adoption, the representative of Pakistan said that the current budgeting system already contained adequate provisions for the formulation, monitoring and evaluation of the United Nations programme budget. Results-based budgeting tended to detract from the international character of the Organization. The concept also lacked clarity and had several notable conceptual flaws. In fact, a discrepancy between output and input could actually place a programme on a slippery slope.

The representative of the United States, however, stressed that the weakness of the current process of programme budgeting was that it failed to determine the effectiveness of the Organization’s work in terms of efficient use of resources, objectives and accomplishments. The Secretary-General’s proposal addressed that critical weakness of the process, while preserving its strengths. Without performance-based budgeting, programme mangers would be denied the tools they needed to deliver the desired outcomes.

Several speakers in the debate stressed the need to agree on the terminology involved. The representative of Syria, for example, emphasized the importance of clearly defining external factors, which could influence programme performance. The lack of such a definition would allow programme managers to blame others if expected accomplishments were not met. As pointed out by the Joint Inspection Unit, at present there was uncertainty about how to reflect external factors in the accountability of programme managers under results-based budgeting.

Fifth Committee - 1a - Press Release GA/AB/3409 27th Meeting (AM) 13 November 2000

Responding to comments made in the debate, the Director of the Programme Planning and Budget Division, Warren Sach, said that the results-based budgeting proposal was budget neutral and would not automatically result in resource reductions. As for identifying expected accomplishments in some areas of United Nations activities, he said that it was a difficult in relation to maintenance of peace, for example. However, the identification must be done on a case-by-case basis, and certain progress had been made in that respect.

The Committee also continued its general discussion of the United Nations common and pension systems this morning, and began its consideration of financing of the United Nations Interim Force in Lebanon (UNIFIL). The Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), Conrad .S.M. Mselle introduced that body’s UNIFIL report.

Also speaking at today’s meeting were the representatives of Republic of Korea, Cuba, Egypt, Libya, Colombia (on behalf of the Rio Group) and Lebanon.

The Committee will continue its work at 3 p.m. Thursday, 16 November, when it is expected to conclude its general discussion of the United Nations common and pension systems and continue its consideration of the financing of UNIFIL.

Fifth Committee - 3 - Press Release GA/AB/3409 27th Meeting (AM) 13 November 2000

Committee Work Programme

This morning, the Fifth Committee (Administrative and Budgetary) met to continue its general discussion of the United Nations common system and to conclude its general debate on the results-based budgeting. (For background information on the results-based budgeting, see Press Releases GA/AB/3407 of 9 November. The Committee was also scheduled to commence consideration of the financing of the United Nations Interim Force in Lebanon (UNIFIL)).

On the latter agenda item, the Committee had before it a report of the Secretary-General (document A/55/482), containing the revised budget of UNIFIL for 1 July 2000 to 30 June 2001. The Secretary-General asks for $225.71 million gross ($221.51 million net), inclusive of budgeted voluntary contributions in kind amounting to around $180,000. That figure incorporates additional requirements for the expansion of the Force, which was endorsed by the Security Council on 23 May.

The Secretary-General says that, of the total budget, operational requirements account for some 62 per cent, military personnel costs reflect 23 per cent, approximately 13 per cent of resources relate to civilian personnel costs and staff assessment comprise 2 per cent of the total.

According to the report, the Secretary-General recommends that the Assembly appropriate an additional amount of $86.76 million gross ($86.30 million net) for the expansion of the mission for 1 July 2000 to 30 June 2001, taking into account the $146.83 million gross ($141.89 million net) already appropriated by the Assembly on 15 June.

Also before the Committee was the related report of the Advisory Committee on Administrative and Budgetary Questions (ACABQ)(document A/55/516), which explains that the mandate of UNIFIL has been extended several times by the Council, most recently in resolution 1310 (2000) of 27 July, which extended the mandate until 31 January 2001. The ACABQ was informed that, as at 30 September, $903.77 million had been reimbursed for troop costs for the period from 1 December 1989 to 31 March 2000, and that the amount owed for the period from 1 April to 31 August 2000 was $26.48 million.

With regard to reimbursement for contingent-owned equipment, the ACABQ was informed that the amount owed from 1 June 1994 to 30 September 2000 was $3.92 million; the estimated amount owed as of 30 September 2000 was $5.94 million; and unliquidated obligations for contingent-owned equipment amounted to $1.41 million. As regards death and disability claims, as at 30 September 2000, 414 claims, totalling $19.56 million, had been paid; unliquidated claims amounted to $3.45 million; and 8 claims were pending.

The ACABQ was informed that, as of 12 October 2000, the cash balance of UNIFIL amounted to $100.2 million. Upon inquiry, the ACABQ was informed that the troop payments for peacekeeping missions were now being made for the period from 1 April to 30 June 2000. The amount of the payment for UNIFIL is $14.7 million.

Assessments for the period from 16 June 1993 to 30 September 2000 amounted to $3,188.2 million, the report states. As of 30 September 2000, payments received totalled $3,021.4 million, and the amount outstanding was $166.8 million. Total unliquidated obligations for the period from 1 July 1999 to 30 June 2000 were $23.55 million for governments and $14.32 million for non-governmental obligations as at 30 September 2000.

The proposed budget of UNIFIL of $225.54 million gross reflects increases of 74.5 per cent ($59.65 million) in military personnel costs; 16.5 per cent ($4.14 million) in civilian personnel costs; 75.5 per cent ($22.51 million) in operational requirements; and 12.2 per cent ($457,100) in staff assessment, the ACABQ reports.

That increase covers an increase in troop strength to 7,935 from the previous authorized strength of 4,513. The Committee was informed that, as of 30 September 2000, 5,732 troops were already in theatre. With regard to civilian personnel, the ACABQ notes that the revised budget proposes an increase of 81 posts (34 international and 47 local staff) from 491 posts (141 international and 350 local staff) to 572 posts (175 international and 397 local staff). It was informed that, against the authorized staffing establishment of 141 international and 350 local staff, posts encumbered, as of 30 September 2000, numbered 131 staff and 350 staff respectively.

Noting that the new reimbursement arrangements came into force on 1 July 1997, the ACABQ reports that it is of the view that the present situation is not satisfactory, since nearly four years after the introduction of the new reimbursement arrangements, the Secretariat is still facing difficulties implementing aspects of the contribution agreements in a timely manner. Of 11 current troop contributors, 10 are expected to choose the wet lease arrangements for reimbursement of contingent-owned equipment.

The ACQBQ recommends approval of the proposal of the Secretary-General that the General Assembly appropriate the additional amount of $86.76 million gross ($86.30 million net) for the expansion of the mission subject to the extension of the mandate of the Force by the Security Council beyond 31 January 2001.

Statements

HASSAN MOHAMMED HASSAN (Nigeria) speaking on behalf of the “Group of 77” developing countries and China, said that results-based budgeting emphasized quantitative outputs. That approach should be customized to cater to the needs of the United Nations and its objectives, which had broad political parametres. Definition of terms and guidelines was an essential element in the successful application of results-based budgeting and should be improved. In a multilateral organization, expected accomplishments, results and indicators of achievement could not fully justify the resource requirements of any given programme. That was particularly so of programmes for which expected accomplishments were difficult, if not impossible, to quantify.

Results-based budgeting should not be conceived as a tool to reduce the Organization’s human or financial resources, he said. Changes, if any, to the budget methodology should be made only with the prior endorsement of the General Assembly. Changes should not affect the regulations governing programme planning and evaluation and financial regulations. The 2002-2003 budget should be prepared on the basis of the medium-term plan for 2002-2005 to be approved by the Assembly during its current session.

The Secretary-General already enjoyed the authority to manage the United Nations financial resources within sections of the budget, he added. The Group endorsed the ACABQ’s recommendation that any specific proposals for additional flexibility be submitted to the Assembly through the Committee in the context of the review of the programme budget proposals for the biennium 2002-2003. It might not be appropriate to extend further authority to programme managers at the present stage. Without a foolproof system of accountability and oversight, enhanced delegation of authority to programme managers for the management of human and financial resources might not result in efficient programme delivery. There was a direct correlation between inputs and outputs. Provision of adequate resources was essential for achievement of expected accomplishments. Adequate financial and human resources should be provided for the effective implementation of all mandated programmes and activities.

ALAMGIR BABAR (Pakistan) associated Pakistan with the position of the Group of 77 and China and said that while the 1997 reform proposals of the Secretary- General had been generally well received, those proposals which tended to detract from the international character of the Organization could not meet with a high degree of acceptance. Results-based budgeting remained one such proposal. It was not a coincidence that it had taken three years to even commence consideration of the proposal. The concept lacked clarity in its definition and methodology. He was also not sure of its relevance in a multilateral organization that pursued sensitive and complex political and socio-economic objectives agreed upon through a process of consensus-building.

The concept implied that if results were not achieved as expected, resources should be cut, he continued. That approach was too commercial. The Secretary- General in his recent report had characterized results-based budgeting as neutral insofar as increases or reductions in budget or staff were concerned. If that were so, he wondered what the proposal was about. Another question that came to mind was why Member States were expected to supplant the established budgetary mechanisms and practices with something so unclear and “fuzzy”. The rather vague interpretation by the Secretary-General had not escaped the attention of the Advisory Committee either.

At the operational level, the proposal had been woven around the need to define in advance “expected accomplishments” for each and every United Nations activity, he said. The Secretary-General regarded “expected accomplishments” to be indistinguishable from “expected results”, but different from “outputs”. The ACABQ did not seem satisfied with that explanation and had stressed the importance of fine-tuning the definitions.

Attempts to base budgetary allocations on expected accomplishments or results had several notable conceptual flaws, he continued. First of all, it was not possible to quantify “expected accomplishments” for United Nations activities that were simply unquantifiable. Also, the concept of “expected accomplishments” or “outputs” was invariably linked to “inputs”. Lately there had been a tendency to impose limits on allocation of required resources and staff, invoking so-called zero nominal growth. In fact, a discrepancy between outputs and inputs could place a programme on a slippery slope, leading to its death. It was also extremely difficult to accurately measure the contribution of external factors to the realization of expected accomplishments for a given programme.

The current rules governing programme planning had only recently been updated, he said. The medium-term plan had also been tailored to a new format to better reflect the desire to infuse efficiency into the system. The current system, together with the changes, therefore contained adequate provisions for the formulation, monitoring and evaluation of the programme budget. Pakistan recommended taking an objective look at the whole issue, with a view to evaluating the relevance of the concept for the United Nations, its future implications and its impact on the present system, before taking a final decision on the proposal.

PARK HAE-YUN (Republic of Korea) said that his delegation had on many occasions stressed the need to strengthen the effectiveness of United Nations programmes through better monitoring and effective evaluation. At present, the Organization was mainly driven by the delivery of inputs and did not effectively monitor their effectiveness. The determination of respected accomplishments was largely ignored. Results-based budgeting sought to address those weaknesses, trying to provide policy direction and achieve better use of resources. It required programme managers to focus more on accomplishments.

Managers would also be held accountable for their decisions, he continued. He looked forward to the implementation of the new concept. Like the ACABQ, he stressed that the introduction of new procedures should not be intended to reduce resources. It was important to expand use of information technologies to implement results-based budgeting, and he added that proper training was critical for its success. He fully endorsed the recommendations contained in the Secretary-General’s report and supported the recommendation from the ACABQ that indicators of achievement be included in the medium term plan for 2002-2003.

SUSAN MCLURG (United States) said that paragraph 7 of the ACABQ’s report spelled out what was at stake. In his report, the Secretary-General had described the weaknesses of the current process of programme budgeting. That process had failed to resolve the fundamental issue of determining the effectiveness of the Organization’s work in terms of efficient use of resources, objectives and accomplishments. The lack of a coherent programming framework had resulted in the absence of a realistic context for setting an optimal level of human and financial resources necessary to implement the mandates entrusted to the Secretary-General. The Secretary-General’s proposal addressed that critical weakness of the process while at the same time preserving its strengths.

The Secretary-General had fashioned a plan that had provided for important steps to make the current budget process more development-oriented, she said. “Expected accomplishments” and “indicators of achievement” were important aspects of those steps. A large part of implementing the Secretary-General’s proposal would involve improving what already existed. Evaluation was a critical part of any management system. The use of performance-based management concepts was key to the success of modern organizations, including the United Nations. Without them, programme mangers would be denied the tools they needed to help them manage more effectively. She supported the proposal, subject to the reasoned conclusions of the ACABQ on way to move forward.

WARREN SACH, Director of the Programme Planning and Budget Division, said that the Secretariat also regarded the ACABQ’s report as constructive. Several delegations had commented on the time it had taken to introduce results-based budgeting. It had been time well spent. It had taken time to educate programme managers, directors and the staff at large. At the intergovernmental level, apprehensions regarding results-based budgeting had also changed during that time. The three years since the Secretary-General first introduced his reform proposals had also given the Secretariat the opportunity to produce necessary documentation. The three years had allowed the Secretariat to set foundations, within the medium- term plan framework, that would be compatible with results-based budgeting.

Some felt that the results-based budgeting approach would automatically result in resource reductions, he continued. The method proposed was budget neutral. Regarding technical comments, some accomplishments were easier to identify than others. That issue had been addressed in developing the prototypes. The Department of Political Affairs had been chosen for one of the prototypes. Those concerned about how to quantify results for concepts such as peace and armed conflict should examine that prototype. It was a difficult question and it was being approached on a case-by-case approach. However, progress had been made in identifying expected accomplishments.

On the issue of external factors, he said that it was important that they were identified, rather than quantified up-front. Regarding the question of flexibility of programme mangers, the flexibility that the Secretary-General had in administering the budget was appropriate. He was not seeking additional flexibility for himself. However, programme mangers needed to exercise their existing flexibility so that they could assure that intended accomplishments were achieved. The Secretary-General did not want to see an expansion of the flexibility he already enjoyed, but the better use made of the already existing flexibility.

EVA SILOT BRAVO (Cuba) said that the report of the ACABQ did not cover several important aspects of programme planning. She supported the position of the Group of 77 and China, and noted that since 1997, when the Secretary-General had proposed his reform package, the lack of information necessary to understand the full scope of the proposal had made it difficult to reach a decision on the matter. The issue was extremely important, as it was related to the identification of the resource requirements and planning of activities of the Organization.

She expressed regret that the fascicles presented to the Committee did not meet the objective of demonstrating the feasibility of the new format. It would be necessary to rework them before the General Assembly took a final look at the proposal. The Secretariat was trying to justify the change by referring to the lack of mechanisms for measuring efficiency. She did not agree with that position, for the current budgeting system contained all the necessary elements. She also objected to arbitrary attempts to reduce the budget. It was paradoxical to try to mitigate inefficiencies by changing the system without addressing policies to change the activities of the United Nations.

The approach taken by the Secretariat was to gradually introduce the methodology of results-based budgeting, she said. However, expected accomplishments must be more concrete. The medium-term plan, as the main policy guideline of the Organization, must include all the elements which would allow a clear definition of policy. A definition of objectives and their impact on mandates must be determined. If the new system were adopted, the budget must continue to provide all the information currently provided.

Delegation of authority to programme managers would give them a high level of flexibility in re-allocating programme funds, she said. The Secretariat should provide a document on the level of flexibility that the Secretary-General already had in that respect. Among the fundamental shortcomings of the proposal was that there was no comprehensive analysis of all the elements of the programming and budgeting cycle. Member States should be fully aware of the scope of the proposal before it was adopted.

A focus on results should not detract from the need for continued use of inputs, such as staff, she said. Interests of States must also be taken into account. The proposed system was strongly related to results, but its implementation must not lead to a reduction in resources. One of the technical errors in the documents before the Committee was that no consideration was given to the inter-relation between the level of outputs for one period and the inputs for the next one. The proposal needed to be further considered before a decision was taken.

AYMAN M. ELGAMMAL (Egypt) asked for Mr. Sach’s comments to be circulated in writing before the Committee proceeded with the item in informal consultations.

ABDOU AL-MOULA NAKKARI (Syria) said that results-based budgeting required extended delegation of authority and should be coupled with increased accountability. On external factors, programme directors would blame others for failing to execute accomplishments. The blame would be borne by Member States. It was necessary to define the concept of external factors in a precise manner. He concurred with the ACABQ’s report on the matter and had also noted the recommendations of the Joint Inspection Unit (JIU) in that regard. External factors were extremely important elements and must be studied in an in-depth manner. The matter should also be examined by the ACABQ and the Committee for Programme and Coordination (CPC). Regarding inputs and indicators of achievement, a link should be made between what had been expected and what had been achieved. Programmes must be given adequate financial and human resources to achieve expected results. Many activities used vague language in defining achievement indicators. Certain objectives, such as the reduction of poverty, could not be achieved within one medium-term plan cycle. Indicators of achievement must be crystal clear. It was impossible to apply the notion the indicators of achievement to many of the programmes. Indicators of achievement should be applied only when possible. A blanket application might impede the work of the programmes rather than help them. The recommendation to establish an open ended- working group was a sound one.

KHALIFA O. ALATRASH (Libya) said that results-based budgeting was a complex matter. Despite the fact that it had been successful in corporations, the call to introduce it in non-profit organizations was controversial. Those supporting its use in non-profit organizations recommended that care be taken and training provided to managers. The Committee must also deal with the concepts and circumstances that could impeded its execution. The objective of non-profit organizations was not to achieve profits but to provide services. There had been many attempts to impose the systems used by profit organizations on the work of the United Nations without taking due consideration of the major differences that governed the two systems. The success of the United Nations had been achieved through the quality of its programmes and their contribution to the goals of Member States. Service was an ambiguous concept that could hardly be measured. Profitability measures did not apply to the United Nations. “Income” was perceived differently.

Programme objectives should not confined to a period of time, he said. Objectives were the main concern of management systems. The efficiency of the Organization could be measured by relating objectives to programmes. They should be quantitatively and qualitatively defined. Indicators of achievements, which were used to measure results, could be affected by external factors that fell outside the framework of the United Nations. Some indicators of achievement, such as those for social programmes, were distorted. A holistic approach was needed. Priorities must be defined and expectations should not be exaggerated. Administrative control must be tight within the Secretariat. He called on the Secretary-General to spare no efforts to ensure the sound use of available resources in an effective manner.

Responding to comments from the floor, Mr. SACH noted that delegates had pointed out the importance of reflecting external factors, and pointed out that the prototypes contained paragraphs to that effect in each programme. The conference room paper on the flexibility of managers to reallocate programme funds would be provided to the Committee. Indicators of achievement in relation to various activities should be identified in advance, whenever possible. If the new approach was followed, they would be included in the next medium-term plan.

In customizing a proposal for results-based budgeting, the Secretariat had worked with models from the public sector, he continued, without reverting to the experience of private commercial companies. The bottom-line of profit could not be used for the United Nations. For that reason, he proposed that expected accomplishments and achievements be used instead. Expected accomplishments were time-limited and subject to verification in subsequent performance evaluation reports. The question of terminology had been brought to the attention of the Secretariat, and it was expected that the single term “expected accomplishments” would be used in the future.

Mr. NAKKARI (Syria) said that the subject would be further discussed in informal consultations. However, with regard to the external factors, he wished to make a clarification. In his previous statement, he had referred to a recommendation of the JIU about the uncertainty of how to reflect external factors in assessments of the accountability of programme managers under results-based budgeting. Definition of that was very important, so as to not open the door for programme managers to blame others if expected accomplishments were not met. Programme managers should be provided with all necessary inputs if they were expected to achieve certain outputs.

The Committee then turned its attention to its agenda item on the United Nations pension and the common system.

GUSTAVO PAREDES (Colombia), speaking on behalf of the Rio Group, reaffirmed the importance of the United Nations common system and the role of the International Civil Service Commission (ICSC) in regulating and coordinating the activities of the Organization. The greatest asset of the common system was the staff, and it was necessary to ensure the best possible working conditions to attract the best possible people. The process of renewal of human resources was only possible if competitive conditions were offered.

The framework for human resources management presented by the ICSC was one of the most important accomplishments of that body, he continued. The Rio Group believed that there should be careful monitoring of the proposed elements to achieve efficient management of human resources. Among the principal concerns should be the well-being of the staff, as well as their safety and security. Recent regrettable incidents illustrated that imperative. Recognition of language skills should be looked at in a broader context of multilingualism and fostering language proficiency in the Organization. Also, any examination of the mandate and composition of the ICSC must include full participation by that important Commission.

Turning to the activities of the Pension Fund, he said that its efficient management was fundamental to making the employment conditions attractive. Positive results for 18 consecutive years testified to the correction of the policy established by the Board of the Fund.

RACHEL GEMAN (United States) said that without the Organization’s dedicated staff -- many of whom worked in dangerous conditions -- the work of the common system organizations would be compromised. It was for that reason that the need to recruit and retain the most competent staff must be kept in mind. The Commission must give due importance to the diversity and the expert needs of all organizations. The United States could support the recommendations set forth in the Commission’s report. That support was conditional, however, regarding the United Nations, on the financial implications being absorbed within the $2.536 billion budget level for the current biennium. It was important that organizations of the common system had a certain amount of flexibility to shape their personnel systems to their specific needs. The report’s identification of core and non-core aspects of human resources managment of the common system was a step in the right direction. She hoped that the Commission’s efforts to finalize the standards of conduct would bear fruit shortly.

Regarding the review of the pay and benefits system, she sought clarification on the creation of a steering committee to direct, over two years, all future work on the pay and benefits system. She wondered how the recommendations of the steering committee could be brought to an open-ended ICSC working group for its consideration at its next session. While improvements in the system were possible, she noted the concern of staff regarding broad-banding. Jobs should not be classified according to the incumbent’s qualifications or grade but solely on the scope and level of the duties required by the job description. Any proposal for change should clearly identify the advantages and disadvantages in all areas of human resources. Regarding the education grant, she strongly supported the Commission’s decision to harmonize the staff regulations and rules of the other organizations with those of the United Nations. Administrations of all the organizations in the system should ascertain whether they had adequate internal controls to avoid abuse of the education grant system as well as other dependency entitlements.

Regarding the review of the ICSC, she agreed that reviews were most effective and focused when the scope and purpose of inquiry was clear. The United States supported a review, which should entail the full participation of Member States, executive heads and staff, members of the Commission and experts in the field of human resources.

When the Committee then turned its attention to the financing of UNIFIL, CONRAD S.M. MSELLE, Chairman of the ACABQ, introduced that body’s report on its financing.

Mr. ALATRASH (Libya), speaking on behalf of the Arab Group, thanked the Secretary-General for his report, and expressed gratitude to the ACABQ for its recommendations. However, having received the report of the Secretary-General only last Friday, the Group was not in a position to discuss the reports before the Committee yet, and he hoped that the item would remain open this week.

GERT ROSENTHAL (Guatemala), Chairman of the Fifth Committee, said that the formal discussion of the item would continue on Thursday afternoon.

HOUSSAN DIAB (Lebanon) asked for clarification regarding informal consultations on the item.

The CHAIRMAN then informed the Committee that at 2 p.m. today an informal briefing would be held by Under-Secretary-General for Internal Oversight Services Dileep Nair on the annual report of the Office of Internal Oversight Services.

On other matters, Mr. NAKKARI (Syria) said that his delegation had recently noticed that the Committee had been increasingly obliged to extend its meetings, particularly in the afternoon. If meetings were extended beyond 15 minutes, there were no interpretation services. It was necessary to finish meetings on time.

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