SECRETARIAT PROPOSES BUDGETS OF $318 MILLION, $604 MILLION FOR EAST TIMOR, DEMOCRATIC REPUBLIC OF CONGO MISSIONS

Fifty-sixth General Assembly

Fifth Committee

58^th Meeting (AM)

SECRETARIAT PROPOSES BUDGETS OF $318 MILLION, $604 MILLION

FOR EAST TIMOR, DEMOCRATIC REPUBLIC OF CONGO MISSIONS

The achievements of the United Nations and the international community in East Timor were commended this morning as the Fifth Committee (Administrative and Budgetary) considered financing of United Nations Transitional Administration in East Timor (UNTAET) and the United Nations Mission of Support in East Timor (UNMISET), the follow-up mission to that country which achieved its independence on 20 May.  The Fifth Committee also considered the financing of United Nations Operations in Somalia (UNOSOM) II and the United Nations Organization Mission in the Democratic Republic of the Congo (MONUC).

Echoing the sentiments of other speakers, the representative of Australia (also speaking on behalf of New Zealand and Canada) said it was a cause of much pleasure and satisfaction that the debate on financing of UNTAET and UNMISET was taking place as the people of East Timor celebrated their independence.  The fact that so much had been accomplished in two and a half years was a credit to the Organization and to the international community at large.

Indonesia’s representative said that UNMISET’s long-term objective should be to empower the people of East Timor, which should be able to contribute to the smooth functioning of its institutions and, ultimately, to the establishment of a peaceful, unified and sustainable society.  Taking note of the unencumbered balance of some $35 million, representing six per cent of UNTAET’s appropriation for 2000/2001, as well as some over-expenditures there, she drew the Committee’s attention to the recommendations of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) calling for better planning and improved efficiency.

[The budget proposal for UNMISET for the period from 1 July 2002 to 30 June 2003 amounted to $318.49 million gross, and the Advisory Committee recommended an appropriation and assessment of an amount of $292 million gross for the operation of the new mission, reflecting a reduction of eight per cent of the amount proposed by the Secretary-General and representing a 30 per cent decrease compared with the operation of UNTAET for the previous budget year.]

Introducing the report of the Office of Internal Oversight Services (OIOS) on the audit of a contract for the provision of airfield services to MONUC, Esther Stern, Director of the OIOS Internal Audit Division, said that the audit had highlighted the risk of making outsourcing decisions without first determining their cost-effectiveness.  The Department of Peacekeeping Operations (DPKO)

objective of meeting MONUC’s urgent operational requirements had not been achieved, and the Department had not followed the established outsourcing

procedures.  Discrepancies and errors in the technical evaluation of proposals conducted by the DPKO might lead to the selection of a more expensive contractor.  The DPKO had indicated that it was preparing to re-bid the requirement for airfield services. 

Addressing the allegations of irregularities and errors in awarding the air services contract, Botswana’s representative said adequate consultations between all stakeholders entrusted with outsourcing and procurement of goods and services for the Organization must be ensured to safeguard full compliance with the relevant policies and procedures of the United Nations.  He noted that DPKO had decided to re-bid the air services contract, and he asked what measures were being envisioned to ensure that air services were not being interrupted.

He said that in light of the lessons learnt, the OIOS, ACABQ and the Board of Auditors should further enhance their coordinated efforts in eliminating any ambiguity, to ensure the preservation of due process.  They should also pay particular attention to the need to strengthen the capacity of those units involved in the complex task of conducting technical surveys before the award of contracts.

Reports on the missions in question were also introduced by Assistant Secretary-General for Programme Planning, Budget and Accounts and United Nations Controller, Jean-Pierre Halbwachs, and by Conrad S. M. Mselle, Chairman of the ACABQ.

The representatives of Spain (on behalf of the European Union and associated States), Japan and Philippines also spoke.

At 10 a.m. tomorrow, 23 May, the Committee will begin its consideration of the United Nations new mission in Afghanistan and take up the financing of the United Nations Mission for the Referendum in Western Sahara (MINURSO) and the United Nations Angola Verification Mission (UNAVEM III)/United Nations Observer Mission in Angola (MONUA).

Background

The Fifth Committee (Administrative and Budgetary) met this morning to consider the financing of the United Nations Transitional Administration in East Timor (UNTAET), the United Nations Operation in Somalia (UNOSOM) II, and the financing of the United Nations Organization Mission in the Democratic Republic of the Congo (MONUC).

For background information, see Press Release GA/AB/3509 of 21 May.

In addition to the reports summarized in yesterday’s press release, the Committee had before it the Secretary-General’s progress report on the status of airfield services contract for MONUC (document A/56/938), according to which the Secretariat has commenced the process required to resubmit the contract for tender or to put other support arrangements in place.  The proposed schedule to complete this process by the end of this year is extremely tight, but attainable.

The Secretary-General’s budget report for the United Nations Mission of Support in East Timor (UNMISET) for the period from 1 July 2002 to 30 June 2003 (document A /56/932 and Corr.1) contains the budget proposal amounting to

$318.49 million gross ($309.25 million net), inclusive of budgeted voluntary contributions in-kind amounting to $60,000.  Forty-two per cent of the budget related to military personnel, 32 per cent to civilian personnel costs, 22 per cent to operational costs, and three per cent of the total.

The Assembly was asked to approve the use for UNMISET of the special account established for UNTAET, to appropriate the amount of the budget for the operation of UNMISET for the 12-month period, and to assess that amount at a monthly rate of $26.54 million gross ($25.77 million net), should the Security Council decide to continue the mandate of the Mission.

The related report of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) (document A/56/945) states that the Advisory Committee considered the proposed budget of UNMISET on the understanding that the Security Council would establish that mission with the mandate outlined in the Secretary-General’s report to the Council.  Should modifications be made pursuant to the Council’s decisions, the Secretary-General would report to the Assembly no later than September.

The Advisory Committee noted in the performance report that additional information shows instances of shortcoming in the monitoring and recording of expenditures by the Secretariat, such as over-expenditures under military personnel for standard troop cost reimbursement and clothing and equipment allowance.  The Advisory Committee is also of the view that the amount of

$19.02 million reported as other income for the cancellation of prior period obligations indicates a tendency to obligate funds without an adequate analysis of the need for such obligations.

It appears, according to the report, that the processing of liquidations for UNTAET is taking an unduly long time.  The process should include both troop-contributing countries and the Administration.  Also, the efficiency of the processing of claims for contingent-owned equipment (COE) needs to be improved.  The under- and over-expenditures in the performance report point to the need for better planning and improved efficiency in procurement and contract management.

The Advisory Committee recommends that the treatment of staff costs in both the performance report and the proposed budget should be reviewed to ensure that the procedures followed conform to United Nations practice.  The use of general temporary assistance for ongoing functions, as has happened in UNTAET, weakens internal control and complicates accounting and reporting.  The amount of travel undertaken during the reporting period appears to the Advisory Committee to be excessive, especially travel from Headquarters.

The Advisory Committee recommends that the unencumbered balance of

$35.41 million, as well as interest and other income of $29.14 million, be credited to Member States in a manner to be determined by the Assembly.

Regarding the cost estimates for the period from 1 July 2002 to 30 June 2003, the Advisory Committee commends the Secretariat and UNTAET for the efforts they have made to formulate an implementation plan and an exit strategy under difficult circumstances.  But it is of the opinion that more could have been done to translate the implementation plan set out in document A/2002/432 and Add.1 into an operational budget.  The estimates contain no overall plan for the drawdown of civilian staff.

The Advisory Committee stresses the importance of the conclusion of a formal agreement between the United Nations and independent East Timor with respect to the expectation that the Mission would end as proposed by the Secretary-General and approved by the Security Council.

The Advisory Committee questions the necessity of establishing a special unit within UNMISET to manage the Civilian Support Group, which would lead to one P-4, two P-3 and one General Service post.  Noting that the increase in the staffing of the Serious Crimes Unit, the Public Defender’s Office and Special Panels from 24 to 60 posts would reflect the consolidation of judges, prosecutors, public defenders and other specialists into one group, it requests that an assessment of lessons learned be made for the benefit of other missions.

The authorized staffing of the Division of Administration of UNTAET (2449) appears unduly large and should be reviewed.  The Advisory Committee is of the opinion that the estimate for air operations ($43.07 million) could be adjusted downward, as could the estimate for transport operations ($5.09 million).  Noting that an amount of $685,400 was estimated for other travel, the Advisory Committee expects that strict controls will result in savings.

The Advisory Committee recommends the appropriation and assessment of an amount of $292 million gross for the operation of UNMISET over the period, subject to a decision of the Security Council regarding the mandate of the Mission.  The recommended amount reflects a reduction of eight per cent of the amount proposed by the Secretary-General.  The Advisory Committee also recommends approval of the use for UNMISET of the special account established for UNTAET.

Introduction of Documents, Comments by ACABQ

The Secretary-General’s reports before the Committee were introduced by United Nations Controller JEAN-PIERRE HALBWACHS, who said that to ensure that the budget of the new East Timor mission was considered by the Assembly during its current session, the estimates were prepared in advance of the Security Council decision on the Mission.  Compared with the current budget, the proposed budget represents an almost 30 per cent reduction.  As it was important to ensure smooth transition from UNTAET to UNMISET, a separate report had been prepared regarding the financing of transitional-period activities.

Regarding the United Nations Operation in Somalia (UNOSOM), he said that as a consequence of delays in the deployment of troops, there were also delays in the employment of staff there.  Also as a result of deferred operations, there was a reduction in the amount used for air operations.

He also pointed out that the reports on the United Nations Organization Mission in the Democratic Republic of the Congo (MONUC) showed an increase in the proposed budget, reflecting an expansion of the United Nations presence in the eastern part of the country there and the launching of the third phase of deployment.

CONRAD S.M. MSELLE, Chairman of the Advisory Committee, said that with respect to East Timor, the ACABQ agreed with the Secretary-General’s proposal on the disposition of assets and on the transitional arrangements. 

Regarding the estimates for the new mission and the performance report, he continued, the Advisory Committee had made a number of comments, drawing attention to some monitoring and management issues that deserved attention.  In particular, it pointed out the need to improve the process of determining the amounts that had to be obligated in order to insure that obligations were not excessive.  Some

$19 million had been cancelled from obligations, and the tendency to obligate without adequate analysis needed to be reviewed.  It was also important to review the process of claims payment. 

With respect to the over- and under-expenditures, the ACABQ had highlighted some items where better planning and budgeting would have improved the situation.  It also pointed out the need to improve the management of staff costs, which should be properly reflected.  On the whole, the ACABQ had commended the Mission and the Secretariat for its improved planning and its formulation of a clear exit strategy in East Timor.  The amount recommended by the ACABQ for the proposed budget represented an eight per cent reduction compared with the Secretary-General’s estimates.

Turning to MONUC, he said that overall, the ACABQ had welcomed the steps taken by the Secretariat to implement its previous recommendations.  The ACABQ had examined the budget proposals in great detail, making adjustments for some costs, including military personnel and staff costs.  In summary, it was recommending an appropriation of some $581.93 million, representing a reduction of $21.98 million gross, from the estimates proposed by the Secretary-General.

The reports regarding air contracts audit had been presented to the Advisory Committee after it had finished its report, he said.  It would follow up on that issue after the comprehensive review of the matter.  On the whole, the Office of Internal Oversight Services (OIOS) reports confirmed the views expressed by the ACABQ in its report.

ESTHER STERN, Director of the OIOS Internal Audit Division, presented the OIOS report on the audit of a contract for the provision of airfield services to MONUC.  The review of the airfield services contract revealed that the Department of Peacekeeping Operations objective of meeting MONUC’s urgent operational requirements had not been achieved.  Inadequate consultations between DPKO and MONUC had led to lack of clarity about the scope of services and the modalities of contracting them.  MONUC believed that most of the services covered by the contract were, in fact, not required, whereas the DPKO held the view that MONUC could choose those services that were needed.  Those issues should have been clarified before commencing the bidding process. 

The audit had also highlighted the risk of making outsourcing decisions without first determining their cost-effectiveness, she continued.  The DPKO had not followed the established outsourcing procedures.  The review had also found several discrepancies and errors in the technical evaluation of proposals conducted by the DPKO, which might have led to the selection of a more expensive contractor.  The DPKO had indicated that it was preparing to re-bid the requirement for airfield services, after re-assessing various options available to ensure that the services were obtained in a cost-effective manner. 

At the conclusion of the audit, the OIOS had made eight recommendations, and in most cases, the DPKO had already indicated the corrective actions it was prepared to take.  The OIOS would continue to monitor the implementation of its recommendations.

DANIEL SOTO (Spain), speaking on behalf of the European Union and Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia, Cyprus, Malta, Turkey, Iceland and Liechtenstein, said consideration of financing of UNTAET and UNMISET had begun on the day following the independence of East Timor.  It was, therefore, only fitting that “we congratulate ourselves for the unqualified and, in light of its complex mandate, unprecedented success story for United Nations peacekeeping that was UNTAET”.

He said that as the United Nations still had a job to finish in East Timor, he affirmed the European Union’s support for UNMISET and concurred with the Secretary-General’s budget proposal and with the recommendations of the ACABQ.  He once again regretted the delay in submissions of reports.

HENRY FOX (Australia), also speaking on behalf of New Zealand and Canada, said it was a cause of much pleasure and satisfaction that the debate on financing of UNTAET and UNMISET took place as the people of East Timor had achieved their independence.  The fact that so much had been accomplished in two and a half years was a credit to the Organization and to the international community at large.  He very much appreciated the hard work of the Secretariat in planning and implementing the seamless transition from one mission to the next.

He said a budget of $318 million gross was being sought for the first year of UNMISET, involving a reduction of 30 per cent from the final year of UNTAET. The budget had been prepared on the basis of progressive downsizing of the military and civilian police components of the mission.  The ACABQ had recommended that the Assembly approve a budget of $292 million gross.  He was ready to support that recommendation on the basis of assurances from the Secretariat that implementation of the mandate of the mission would not be adversely affected by that reduction.  Regarding the other three reports, he supported the courses of action proposed by the Secretary-General.

DEWI SAVITRI WAHAB (Indonesia) said that East Timor’s journey towards sovereign statehood was inseparable from the successful conclusion of UNTAET’s mandate.  Following the historic celebrations on 20 May, her Government would continue to work towards implementing forward-looking relations with East Timor for the mutual benefit of the two peoples.  Indonesia extended its support to the newly established UNMISET. 

With regard to the financial performance report of UNTAET, she took note of the unencumbered balance of some $35 million, representing six per cent of the appropriation, as well as the practice of over-expenditure there.  In that connection, the ACABQ recommendation calling for better planning and improved efficiency should be given due consideration.  In the light of that recommendation, her delegation believed that the Secretariat needed to adopt efficiency measures not merely in regard to that particular mission, but also in respect of other missions. 

As for the proposed budget for UNMISET for the period of 2002/2003, she said that it represented a 30 per cent decrease from that of the operation of UNTAET for the previous budget year.  The ACABQ believed the resources could be reduced to achieve effectiveness and efficiency of the mission, and she believed that the required resources recommended by the Advisory Committee in the amount of

$292 million gross would be a good basis for further consideration.

Continuing, she said that reference to militia elements contained in the Secretary-General’s report S/2002/432 and Add.1 and resolution 1410 (2002) conveyed an inaccurate impression and did not correspond to the prevailing realities.  In view of the proposal for the downsizing of the peacekeeping force in four phases over two years, her delegation underscored the need for objective assessment in the future.  The new Mission’s long-term objective should be to empower the people of East Timor, which should be able to contribute to the smooth functioning of its institutions and, ultimately, to the establishment of a peaceful, unified and sustainable society.

SHINICHI YAMANAKA (Japan) reaffirmed her country’s commitment to peacekeeping operations, in particular in East Timor and the Democratic Republic of the Congo.  Her delegation shared the concern of the Advisory Committee over continuing cash-flow difficulties experienced by MONUC.  However, the budget cycle of most countries did not correspond with the cycle of United Nations peacekeeping budgets.  As some countries experienced difficulties in paying their contributions, she commented that Member States should be encouraged to pay their dues, rather than discouraged. 

MARIA ROSARIO C. AGUINALDO (Philippines) said that like other speakers, she welcomed the mandate of UNMISET and recognized the success of UNTAET and the need for further assistance for the people of East Timor.  She was inclined to support the recommendations reflected in the reports of the Secretary-General and the ACABQ, particularly regarding achieving greater efficiency in peacekeeping operations.

COLLEN VIXEN KELAPILE (Botswana) said he joined previous speakers in expressing appreciation for what had been achieved in East Timor.  The economic situation there indicated that the people of East Timor would still need the support of the international community.  He also supported the continued involvement of the United Nations in Somalia.

He attached great importance to the peacekeeping efforts in the Democratic Republic of the Congo and would do everything possible to ensure that funding for MONUC was provided on a more timely and predictable fashion.  He agreed with many of the comments and recommendations of the ACABQ on the functioning of MONUC. Regarding the allegations of irregularities and errors in awarding the air services contract, he said adequate consultations between all stakeholders entrusted with outsourcing and procurement of goods and services for the Organization must also be ensured.  That would safeguard full compliance with the relevant policies and procedures of the United Nations.  He noted that following the findings of the OIOS, DPKO had decided to take corrective actions to re-bid the air services contract, and asked if that process had already been initiated and what measures were being envisioned to ensure that air services were not being interrupted.

In light of the lessons learnt, the OIOS, ACABQ and the Board of Auditors should further enhance their coordinated efforts in eliminating any ambiguity.  They should ensure the preservation of due process, and to pay particular attention to the need to strengthen the capacity of those units involved in the complex task of conducting technical surveys before the awards of contracts.  Out of eight recommendations of the OIOS, the DPKO had accepted most, but had commented upon recommendations one, four and five with some qualifiers.  He asked the Secretariat if there were any serious difficulties posed by those recommendations.

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