Fifty-eighth General Assembly

Fifth Committee

8^th Meeting (AM)

BUDGET COMMITTEE DELEGATES VOICE SUPPORT FOR INTERNAL OVERSIGHT ACTIVITIES,

CITING SIGNIFICANT AMOUNTS OF MONEY RECOVERED

Audits, Inspections, Investigations Address Management

Inefficiency, Poor Deployment of Staff, Improper Use of Resources, Committee Told

Over the past year, the Office of Internal Oversight Services (OIOS) had produced some 2,700 recommendations to improve internal controls and correct underlying obstacles to organizational efficiency and effectiveness, which could result in savings and recoveries of $37 million, the Fifth Committee (Administrative and Budgetary) was told this morning, as it began its consideration of OIOS activities.

Introducing a series of documents, including the annual report of the Oversight Office and results of a series of audits conducted by that Office, the Under-Secretary-General for Internal Oversight Services, Dileep Nair, said the OIOS had sought to maximize its impact on the Organization by carrying out balanced and objective oversight activities in partnership with Member States and managers at all levels.  Audits, inspections and investigations had addressed administrative bottlenecks, such as management inefficiency, poor deployment of staff, and improper use of resources.  As of August 2003, over 50 per cent of all OIOS recommendations and 33 per cent of the critical recommendations had already been implemented by management.

Delegates expressed their support for the activities of the OIOS and their appreciation for the investigations conducted by the Office, which had resulted  in the recovery of significant amounts of money.  They also commended the introduction of a risk-based work-planning framework, which would improve oversight and facilitate cross-disciplinary teamwork.  However, some speakers voiced their concern about the large number of OIOS recommendations that had not been implemented, including many critical ones.

The representative of the United States expressed alarm concerning the findings of the audit on United Nations information centres (UNICs).  Those included:  the inability to assess the relevance, impact and effectiveness of the centres; a serious lack of reporting and evaluation; a lack of criteria for allocating resources; severe under-utilization of library facilities at a number of centres; and the need for an urgent rethinking of the UNIC concept, mandates, goals and strategies.  Her delegation was particularly concerned by the lack of planning, reporting and evaluation by centres.

In the future, the existence of a centre or a hub should be dependent upon a proven need for its presence and should be accompanied by a clear operational strategy, she said.  The ongoing unit reform should drastically reduce the number of country centres in every region, which should be replaced with well conceptualized hubs, funded by resources freed from the closure of national centres and staffed with national information officers in a logically prescribed manner.

Australia’s representative said that the centres did not produce results commensurate with their costs and highlighted the need for an urgent rethinking of the concept of the centres in terms of usefulness and continued relevance.  He appreciated the decision to proceed with closing several centres in Western Europe and open a new regional hub, but that could not be the end of the process, since there were serious shortcomings in the whole network of centres.

Another source of concern for governments was the excessive size and cost of administration in many parts of the Organization, and delegations urged the Secretary-General to take steps to improve the productivity of administrative functions, including through implementation of OIOS recommendations.

Regarding the audit of the Investment Management Service of the United Nations Joint Staff Pension Fund, speakers emphasized that its management affected the staff who relied on it during their retirement.  For that reason, it was disturbing that the audit had revealed serious weaknesses in the internal control system of the Service that exposed that fund to unwarranted risks.  While certain measures had already been taken, speakers urged the Secretary-General and the management of the Fund to take steps quickly to remedy the deficiencies identified by the OIOS and trusted that the Office would continue to monitor that situation.

Mark Gilpin, Chief of the Contributions Service in the Department of Management, introduced the report on the peacekeeping scale of assessments.  He said that under the current system established in resolution 55/235, Member States were assigned to one of 10 levels –- A to J -– with level A comprising the permanent members of the Security Council, and level J including those on the list of least developed countries.  Member States in level B paid at the same rate as for the regular budget, and those in levels C to J received a discount from their regular budget rate ranging from 7.5 per cent to 90 per cent.  States in level A paid the balance pro rata to their regular budget rates of assessment.

As peacekeeping missions were established by the Security Council, Japan’s representative advocated establishing a mechanism for dialogue between the Security Council and major financial contributors, which would allow the governments of major financial contributors to continue to pay their share of peacekeeping expenses with the understanding of their taxpayers.

He said he wondered if the permanent members of the Council were bearing a sufficient portion of peacekeeping expenses.  Under the present scale methodology, Japan’s peacekeeping assessment rate (close to 20 per cent) was larger than the total assessment rates of four permanent members of the Security Council.  After the Council took a decision on establishing a mission, Japan was sent an invoice requesting one fifth of its entire cost.

Also speaking this morning were the representatives of Italy (on behalf of the European Union), Republic of Korea, Thailand, Bahamas, Russian Federation, China, and Saudi Arabia.

Other reports before the Committee were introduced by Vladimir Belov, Chief of Common Services Unit, Programme Planning and Budget Division, and Sharon Van Buerle of the Office of Programme Planning, Budget and Accounts.

The Committee will continue its work at 10 a. m. tomorrow, 24October.

Background

The Fifth Committee (Administrative and Budgetary) this morning was scheduled to take up the activities of the Office of Internal Oversight Services (OIOS); begin its review of the United Nations’ efficiency; and consider the peacekeeping scale of assessments and several reports under its agenda item on the current programme budget (2002-2003).

OIOS Reports

The first document before the Committee was an annual report of the Office of Internal Oversight Services (OIOS) (document A/58/364), which shows the impact of internal oversight on accountability, efficiency and quality of management in the United Nations over the past 12 months.  During the period under review, the Office has identified recoveries and potential savings within the Organization totalling some $37 million, of which over $15 million has actually been recovered and saved.  Some 2,700 recommendations have been issued, calling for productivity improvements and accountability for fraud, waste and abuse.  Over half of these recommendations have actually been implemented.

The report also highlights an approach that the OIOS has taken this year to identify the main priorities and key risk areas through a risk-management framework.  The areas that expose the Organization to the highest amount of risk include safety and security, procurement and peacekeeping.  The OIOS hopes that in promoting this risk-assessment methodology, it will gain support of managers, who should be able to identify and mitigate the more serious risks that the Organization faces in its various operations and programmes.  Another part of OIOS’s strategy concerns the Organizational Integrity Initiative, which was launched together with other United Nations departments earlier this year to convey a positive message on ethics and integrity in the workplace.

Highlighting oversight activities over the last 12 months, the report points to a collaboration with the European Anti-Fraud Office, where a misappropriation of some $4.2 million by a former senior staff member of the United Nations Interim Administration Mission in Kosovo (UNMIK) was investigated, leading to a successful prosecution of this person by his national authorities.  The OIOS has also undertaken change management consulting assignments in a number of departments of the United Nations, including the Department for General Assembly and Conference Management, the Department of Public Information (DPI), and the Office of Human Resources Management.

A further highlight over the past year has been the audit of United Nations information centres (UNICs) (see also document A/57/747), which has led to a far-reaching reform effort, undertaken by the DPI.  According to the document, information centres in developing countries require a different managerial approach from those located in developed countries, which have easy public access to the Internet and library facilities.  Based on the OIOS recommendation related to the assessment of the need for centres in developed countries, particularly because those centres are absorbing the bulk of available staff and funding resources, the DPI is already taking steps to assimilate a number of information centres in Europe into a single regional hub.

Also before the Committee was an OIOS report on the audit of the functioning of the Headquarters Committee on Contracts (document A/58/294), which advises the Assistant Secretary-General for Central Support Services concerning proposed procurement actions over $200,000 and contracts involving income to the Organization.  The audit disclosed that the Headquarters Committee on Contracts continued to have a profound impact on the Organization’s procurement, although its functioning could still be improved.  During the period from January 2000 to August 2002, 1,498 procurement cases valued at approximately $3 billion were submitted to the Committee for review, and the OIOS found that case submissions valued under $1 million totalled around 68 per cent in number, but only about 11 per cent in value.  In the opinion of the OIOS, the Contracts Committee review function could be made more efficient if the current threshold for review were increased from $200,000 to $500,000, or even $1 million.

The Headquarters Committee on Contracts reviewed 90 cases valued at about $81 million (about 10 per cent of the total cases reviewed on an ex-post facto/partial ex-post facto basis (that is, after the actual procurement action had been completed).  The audit disclosed, however, that most of the cases did not meet the Procurement Manual’s definition of exigency.  In the opinion of the OIOS, ex-post facto cases not strictly involving administrative delays should be referred to the Controller to determine the managers’ accountability for non-compliance with financial rules.

The Oversight Office made a number of recommendations for action by the Under-Secretary-General for Management, the Assistant Secretary-General for Central Support Services, and the Chairman of the Headquarters Committee on Contracts.  Management generally concurred with those recommendations; however, they did not agree with some findings, or with the need to transfer the administrative authority of the secretariat of the Committee from the Office of Central Support Services to the Office of the Under-Secretary-General of the Department of Management.

Peacekeeping Scale of Assessments

Also before the Committee was a report of the Secretary-General on Implementation of General Assembly resolutions 55/235 and 55/236 (document A/58/157) related to the peacekeeping scale of assessments.  Peacekeeping mission budgets are handled through a separate budgeting cycle and process -– normally at the spring session of the Fifth Committee.  Once a mission is established by the Security Council, a detailed budget is prepared on an annualized basis (1 July of first year through 30 June of the following year).  The budget is then reviewed by the Advisory Committee on Administrative and Budgetary Questions (ACABQ) and the General Assembly, and funding is approved subject to extension of the mandate.  Some budgets, nevertheless, have to be considered at first part of the fifty-eighth session, including the United Nations Organization Mission in the Democratic Republic of the Congo (MONUC), Liberia and Côte d’Ivoire.

In its resolution 55/235, the General Assembly reaffirmed the principles underlying the financing of United Nations peacekeeping and adopted a new system of adjustments of the scale of assessments for the regular budget to be used in fixing rates of assessment applicable to peacekeeping operations.  This system was based on assigning each Member State to one of 10 levels, using its average per capita gross national product (GNP) during the period 1993-1998 and other criteria.  Also in its resolution 55/235, the Assembly decided on assessment percentages for the Republic of Korea until 2005, as an ad hoc arrangement.  In resolution 55/236, it welcomed voluntary movements by a number of Member States to levels higher than would result from the application of the new system.

In its resolution 55/235, the General Assembly also requested the Secretary-General to update the composition of the levels on a triennial basis, in conjunction with the reviews of the scale of assessments for the regular budget, in accordance with the criteria established in the resolution, and to report thereon to the General Assembly.  In response to that request, the document provides information on changes in the peacekeeping levels of Member States based on average per capita gross national income during the period 1996-2001.  These are based on the same data as those used by the Committee on Contributions in preparing the regular scale of assessments for 2004-2006.

Review of Efficiency

Before the Fifth Committee was a note by the Secretary-General (document A/58/211), which transmits an OIOS report on the review of duplication, complexity and bureaucracy in United Nations administrative procedures and processes.  The OIOS found that the Secretariat’s administrative environment is neither fully leveraging the advantages of technology, nor applying modern management practices. Many of the administrative processes are still cumbersome, time-consuming, and costly to administer.

Based on observations, suggestions and ideas generated in numerous discussions with staff, several recommendations were formulated, and work to implement some of them has already commenced.  The Department of Management provided an update of the status of two such initiatives, one being the development of an automated solution for staff members applying for dependency allowances and the other being the establishment of a group to work on the automation of the education grant process.  The Department also launched a task force to review delegation of authority in the Organization, and to address the definition of the roles and responsibilities of the executive office.  It also reported that the Information and Technology Services Division had completed the establishment of a central registry for systems, which is now available on the United Nations Intranet.

Also before the Committee was a note by the Secretary-General on the OIOS audit of the Investment Management Service of the United Nations Joint Staff Pension Fund (document A/58/81).  According to the document, the audit’s findings included weaknesses in the internal control system, inadequate procedures for documenting the investment process, and a need to improve the efficiency and transparency of investment operations.  The audit of procurement and contract administration revealed a number of problems requiring attention, including the absence of documented procedures, non-compliance with United Nations procurement policies, inadequate monitoring of vendor performance, and insufficient tracking and monitoring of the procurement process and contract administration.

The representative of the Secretary-General for the investments of the Fund at the time of the audit accepted most of the recommendations of the Office of Internal Oversight Services, which are in the various stages of implementation.  The Investments Committee also discussed the observations of the Office at a meeting in November 2002 and noted that some recommendations had already been addressed, while others needed further consideration.

2002-2003 Budget

The first document before the Committee on this agenda item was a report on construction of additional office facilities at the Economic Commission for Africa (ECA) in Addis-Ababa (document A/58/154).  The construction was approved by resolution 56/270 in March 2002.  According to the document, a request for proposals for professional architectural and engineering services was issued to selected firms by November 2002, as scheduled, and four firms were evaluated in January 2003.  However, all four were found to be unacceptable, and a decision was made to re-bid expeditiously.  This process is to be completed by the end of August 2003.

Among other developments described in the report is recruitment of a construction architect to act as project coordinator, and agreement between the United Nations and the host Government for additional land for the new building.  Construction is to be completed in November 2006.  It is expected that the delay in connection with re-bidding will not affect the total cost of the project.

In a related report (document A/58/7), the ACABQ recommends that the General Assembly take note of the Secretary-General’s report of additional office facilities at ECA.

Also before the Committee was a report of the Secretary-General on strengthening the Department of Public Information within existing capacity, in order to support and enhance the United Nations Web site in all official languages of the Organization:  follow-up (document A/58/217).  According to this document, the DPI is realigning its priorities in order to strengthen the language capacity in the Website Section.  The ultimate objective is to make available to the users a technologically sound, continually updated, intuitive and user-friendly Web site in all the official languages.  A key component of the Department’s plan to strengthen language parity on the Web site is the expansion of the United Nations News Centre into all official languages by mid-September 2003.  Recent linkage of the Official Document System (ODS) for parliamentary documentation to the Web site is also an important step towards achieving parity.

In line with decision 57/579, a key priority for the Department, is to institutionalize the language capacity in the Website Section through allocation of regular posts for three of the language assistants (Arabic, Chinese and Spanish), who are currently on general temporary assistance.  In the context of the 2004-2005 budget, one P-4 post and six General Service posts will be redeployed, thus strengthening the language capacity to the Web site.  Some of the resources to be freed up by consolidating the information centres in Europe into a regional hub are also to be redeployed towards that end. 

While major portions of the work on the Web site, such as design, programming, webcasting and overall oversight would need to be carried out from Headquarters, some elements, including translation, routine updating and maintenance, could be carried out by full-time qualified language assistants operating out of information centres working in respective areas.  That would require strengthening of management capabilities in various languages at Headquarters.  The Department intends to undertake a pilot exercise, once resources are available, at one duty station to test the viability of the concept.  It is also implementing new approaches, such as the use of worldwide academic community to expand its language capacity, and working in close cooperation with other departments throughout the Secretariat.  In the next few months, with the assistance of pro bono services, a thorough analysis of the Web site will be carried out.

In the related report of the ACABQ (document A/58/7/Add.1), the Advisory Committee takes note of the report of the Secretary-General on strengthening the Department of Public Information (summarized above).

Introduction of Documents

DILEEP NAIR, Under-Secretary-General for Internal Oversight Services, introduced the annual report of the Office of Internal Oversight Services (OIOS), the OIOS report on the audit of the Headquarters Committee on Contracts, and the OIOS report on United Nations information centres (UNICs).

During the period covered by the annual report, the OIOS had sought to maximize its impact on the Organization by carrying out balanced and objective oversight activities in partnership with Member States and managers at all levels, he said.  Audits, inspections and investigations had addressed administrative bottlenecks, such as management inefficiency, poor deployment of staff and improper use of resources.

The Office had issued 2,737 recommendations as a result of internal audits, inspections, evaluation and investigations, to improve internal controls and correct underlying obstacles to organizational efficiency and effectiveness.  He said 29 per cent of all recommendations were classified as critical to the Organization, calling for improvements to productivity, savings and recoveries, and accountability for fraud, waste and abuse, among other things.

As of August 2003, over 50 per cent of all OIOS recommendations had already been implemented by management. Of the critical recommendations, 33 per cent had been implemented, he said.  Those recommendations, if implemented, could result in savings and recoveries estimated at approximately $37 million.  The actual savings, based on OIOS recommendations, totalled $15.4 million.  This included recoveries of almost $9 million and reduced expenditures of over $8 million.

Statements

ROBERTO MARTINI (Italy), speaking on behalf of the European Union and associated States, endorsed the annual report of the OIOS, saying that the Union was fully supportive of that body’s activity under its mandate to further enhance the United Nations’ efficiency.  The investigations conducted by the Office, which had resulted in the recovery of significant amounts of money, were appreciated.  However, he was concerned about the large number of OIOS recommendations that had not been implemented, including many critical ones.  On the other hand, the implementation of the recommendations in such areas as peacekeeping or management of the Office of the Office of the United Nations High Commissioner for Refugees (UNHCR) were leading to significant improvements.  Those two sectors were priorities for the Union.

He welcomed the organizational integrity initiative launched in May and noted with satisfaction the positive evaluation by the Oversight Office of the progress made by the Office of Human Resources Management.  The OIOS recommendations would continue to be important guidelines in that respect.

In the area of results-based management, the Union fully supported the view that senior managers must continuously monitor progress towards planned objectives and realization of expected accomplishments.  The Secretariat’s capacity for self-evaluation and self-monitoring should be further enhanced, and the OIOS could help programme managers in that regard, he said.

Finally, it was appreciated that the OIOS had introduced a risk-based work-planning framework, which would improve oversight and facilitate cross-disciplinary teamwork.  He supported the initiatives undertaken by the Office in order to improve its effectiveness, to the benefit of the Organization.

The European Union also appreciated the work by the Oversight Office as far as the audit of the Headquarters Committee on Contracts was concerned.  As for the review of the structure and operations of the information centres, he supported the rationalization of the public information sector and, in particular, the streamlining and revitalization of the information centres.  The DPI had already undertaken the implementation of many of the recommendations contained in the report.  The European Union’s example with closure of nine United Nations information centres must be followed without delay by similar measures in other regions.

MELANIE ATTWOOLL (United States) said that tomorrow her delegation would address the annual report of the OIOS, but today she wanted to focus on the UNICs.  The report on the matter shed much-needed light on the stark reality of the UNIC programme and provided sound guidance to be heeded by the DPI in implementing UNIC reform.  The findings of the audit were sobering and included the inability to assess relevance, impact and effectiveness of the centres; a serious lack of reporting and evaluation; lack of criteria for allocating resources; severe under-utilization of library facilities at a number of centres; and the need for an urgent rethinking of the UNIC concept, mandates, goals and strategies.

The United States supported a consolidated and coordinated approach to information dissemination, which would target activities where there was a clear need for them and would have more impact in regions than the current arbitrary existence of centres.  She said she was pleased to note that DPI and the European Union had successfully closed nine information centres and agreed on a hub to be operational in 2004.  A similar approach in all other regions would result in a more consistent and successful public information campaign.

The Oversight Office had noted the widespread duplication of activities between centres and other United Nations bodies in the same countries, she said.  The United States fully concurred with the comments of the OIOS that, to the extent possible, the United Nations should call on civil society partners –- such as national United Nations associations and non-governmental organizations -– and other United Nations entities to assume greater responsibility in the area of public information.  All information hub and centre activities should be coordinated with other United Nations bodies in the region to ensure that there was no duplication.  She also wanted to know what steps had been taken to meet the request contained in resolution 56/253 on exploring the option of cost-sharing.

Her delegation was particularly alarmed by the lack of planning, reporting and evaluation by centres, which suggested that many of them were being funded for no other purpose than to have an office open in a given country.  She said the reporting provided at the time of the audit had been completely inconsistent from one centre to the next and often appeared to be entirely irrelevant due to late submission.  Accordingly, she wanted to know why those in DPI responsible for administering and providing oversight for the UNIC programme had not taken steps to ensure that the programme was implemented in an effective and efficient manner.

Field information activities represented approximately one fourth of DPI’s budget, but had no successful mechanism for assessing impact and relevance, she said.  In the future, the existence of a centre or a hub should be dependent upon the proven need for its presence in that country and be accompanied by a clear operational strategy, complete with expected results and benchmarks for impact.

Concluding, she said the United States would like to reiterate its firm commitment to expeditious and thorough UNIC reform.  The new initiative should drastically reduce the number of country centres in every region, which should be replaced with well conceptualized hubs funded by resources freed up from the closure of national centres and staffed with national information officers in a logically prescribed manner.

OIOS Reports on Administrative Procedures, Pension Fund

Mr. NAIR then introduced the reports of the OIOS on the review of administrative procedures and policies to eliminate duplications, and the audit of the United Nations Joint Staff Pension Fund.

Mr. MARTINI (Italy), speaking on behalf of the European Union and associated States, commended the OIOS for its informative and comprehensive report on review of administrative procedures to eliminate duplication.  He noted with satisfaction that the implementation of new administrative processes was in progress or even concluded in some offices.  However, many processes were still manual, cumbersome, time-consuming and inefficient, and he expected further steps to be taken to rationalize them.

Given the substantial resources provided in the last years for information and communications technology, which were intended to enhance the efficiency of administrative processes, he expressed surprise to find out that the Secretariat’s administrative environment was not fully leveraging the advantages of technology or applying modern process management practices adopted by other organizations.

The OIOS had also focused its analysis on the travel, procurement and administration of staff entitlements, he continued.  Similar problems existed in other administrative areas, and he requested the Secretariat, in light of the report, to review administrative processes and procedures in other areas.  As the Secretariat stated in its follow-up report, consolidating the delivery of common support services would mean a major shift with budgetary implications.  From the point of view of the European Union, that shift was necessary in order to avoid further duplication and waste of resources.

DAVID DUTTON (Australia), also speaking on behalf of Canada and New Zealand, said that in the past year, it had again been evident that the Oversight Office was an indispensable agent for reforming the United Nations.  Its work was helping to create a culture that valued accountability, responsible management, effective use of resources, performance and results.

The “organizational integrity initiative” was a welcome innovation, and he agreed that high standards of integrity and ethics were crucial ingredients for strengthening the Organization.  He urged the Secretary-General and the OIOS to ensure that ethical standards were clearly defined, that all staff received appropriate training, and that an effective system existed for preventing fraud and misconduct.  When problems did arise, there needed to be appropriate means for reporting and investigating allegations and ensuring accountability.

The delegations he represented also welcomed the work of the OIOS towards strengthening results-based management, which promoted the cultural shift from management that focused on outputs to management that focused on results, he said.  He was also impressed with the development of a risk framework that would guide the work programme and resource allocation of the OIOS.

He expressed concern, however, over the fact that the UNHCR in Nairobi had not yet introduced an effective system for receiving and investigating complaints made by refugees.  The Oversight Office had also stated that the current system of refugee registration remained susceptible to fraud.  He would appreciate further information on that situation.  He also remained very interested in the United Nations’ response to General Assembly resolution 57/306 on the sexual exploitation of refugees.  The Organization had special responsibilities to protect vulnerable people within its care from sexual abuse.  Recent publication of Secretary-General’s bulletin 2003/13 was a welcome step, and he would return to that issue when the report requested in 57/306 was submitted.

Another source of concern was the situation described in paragraphs 117-119 about other investigations in Nairobi, and he said he would appreciate an explanation as to why the recommendations of the OIOS had been rejected.  Clarification was also needed on the application of the procurement rules at the relevant duty station.

Turning to the report on information centres, he said that it showed that they -– as presently constituted and operated -- did not produce results commensurate with their costs.  He agreed that there needed to be “an urgent rethinking of the concept of the United Nations information centres in terms of usefulness and continued relevance”.  He appreciated the decision to proceed with closing several centres in Western Europe and open a new regional hub.  It made good sense to start in high-cost developed countries, which had the most advanced communications technologies.  However, that could not be the end of the process, since there were serious shortcomings in the whole network of centres.  The essential point for the delegations he represented was that the Organization could not continue to fund the activity that had been shown to be unproductive and outdated.

Regarding duplication and complexity in administrative processes, he expressed concern about the excessive size and cost of administration in many parts of the Organization and urged the Secretary-General to take steps to improve the productivity of administrative functions, including through implementation of OIOS recommendations.  He expected information technology investments to lead to demonstrable improvements.

As for the audit of the investment management service of the Pension Fund, he said that it had revealed serious weaknesses in the internal control system of the service that exposed the Fund -– and the staff who relied on it during their retirement –- to unwarranted risks.  He was concerned over the findings of the OIOS, but pleased that its recommendations had been accepted.  He urged the Secretary-General to take steps quickly to remedy the deficiencies identified by the OIOS and trusted that the Office would continue to monitor that situation.

Ms. ATTWOOLL (United States) said the report of the OIOS on the review of duplication, complexity and bureaucracy in United Nations administrative processes and procedures would be an important tool in this year’s budget review.  Her delegation had noted that the OIOS had focused on processes and procedures related to travel, procurement and staff entitlements and that many of the findings could be applied to other manual tasks in the United Nations.  She would appreciate hearing from the OIOS on which additional areas could benefit from a similar review, and whether such an assessment had already been initiated, either by the OIOS or relevant departments.

The Oversight Office had identified the World Bank as a useful example for benchmarking.  The United Nations should explore the feasibility and advantages of instituting a “mobility premium” similar to that used by the World Bank, she said.  The United States appreciated the scrutiny given to United Nations travel claims; however, given the monumental bureaucracy involved in that task, her delegation felt that there was ample room to revise the system.  The General Assembly had repeatedly expressed its concern about the slow turnaround time for travel claims, and her delegation would like to know what measures had or would be taken to reshape and streamline that highly inefficient function.

Finally, she questioned why, after the substantial time and resources dedicated to the Integrated Management Information System (IMIS) and other information technology initiatives, there was still a huge reliance upon manual processes.  Her delegation was also alarmed by the lack of oversight and accountability regarding the transition to, and implementation of, an electronic United Nations.

TOM REPASCH (United States) commented on the report of the OIOS on the Audit of the Investment Management Service.  While his delegation acknowledge the progress made in implementing the audit recommendations, it could not help express its disappointment on reading about the extremely poor management in the multi-billion dollar investment management office.  His delegation was extremely disturbed by the overall findings, which highlighted the Investment Management Service’s poor organizational structure, improper segregation of duties and a disregard for proper investment procedures.

In an operation like the Investment Management Service, documentation and record keeping were of paramount importance, he said.  That was why his delegation was surprised to read that the Secretariat did not respond to the Oversight Office recommendation for the documentation of verbal instructions made by authorized officials.  His delegation stood firmly on the side of the OIOS in its view that the United Nations code of conduct was not comprehensive enough to address the specific elements and requirements of the Service’s investment staff.  The Service must also be held responsible for stemming duplication and waste, he said.

He concluded that there was a need for stronger accountability measures in the United Nations.  When officials were found to have mismanaged their operations, the United Nations must take a clear and forceful action to fix the problems, prevent them from reoccurring, and send a signal to the staff that there was no tolerance for such behaviour.

Peacekeeping Scale of Assessments

MARK GILPIN, Chief of the Contributions Service of the Department of Management, introduced the report on the peacekeeping scale of assessments, saying that in resolution 55/235 the Assembly had reaffirmed and established certain principles for the financing of United Nations peacekeeping operations.  It had also established a new system of adjustments of regular budget rates of assessment to fix Member States’ peacekeeping rates.  That system involved assigning Member States to one of 10 levels -– A to J -– with level A comprising the permanent members of the Security Council, and level J including those on the list of least developed countries.  Member States in level B paid at the same rate as for the regular budget, and those in levels C to J received a discount from their regular budget rate ranging from 7.5 per cent to 90 per cent.  States in level A paid the balance pro rata to their regular budget rates of assessment.

In its resolution 55/236, the Assembly had welcomed the voluntary commitment of several Member States to pay at a rate higher than required by their per capita income, he said.  In paragraph 15 of resolution 55/235, the Assembly had also requested the Secretary-General to update the composition of levels on a triennial basis, in conjunction with the review of the regular budget scale and in accordance of the established criteria.  For the purposes of the updating, it had been assumed that Member States, other than Turkey, that had moved voluntarily to a higher level, would remain at that level, unless they indicated otherwise.  None of the Member States listed in resolution 55/236 had so far indicated an intention to change their earlier status.

A letter had been received from the Republic of Korea, however, requesting that it revert in 2004 to its “natural” level under the criteria set out in 55/235 -– that is, level D, he said.  In paragraph 22 of its resolution 55/235, the Assembly had decided on specific ad hoc arrangements, outside the general transitional provisions of the resolution, for that country to move up gradually to 100 per cent of its regular budget assessment rate for peacekeeping in 2005.  In light of the particular circumstances of its situation, the Assembly would need to consider what action to take regarding the request from the Republic of Korea.  More generally, the Committee might wish to take note of the Secretary-General’s report on the updating of the composition of peacekeeping levels.

Mr. MARTINI (Italy), speaking on behalf of the European Union, said the new methodology for the apportionment of the expenses of peacekeeping operations was fixed until 2009.  Therefore, this year the fifty-eighth General Assembly was due only to update the composition of the levels assigned to Member States in conjunction with the review of assessments to the regular budget, as proposed by the Committee on Contributions in consideration of the effective gross national income date for the 1996-2001 base period.

The Secretary-General’s report was an important point of reference for the Fifth Committee’s discussions, he said.  It confirmed the importance of the full application of all paragraphs of resolution 55/253 without exception.  In that respect, the Union wanted to see respect for agreements regarding Member States’ placement in the scale’s group structure.  All transition periods agreed for specific Member States in December 2000 must be implemented.  There was no provision for -– nor could the European Union agree to –- movement between groups during the course of the next three-year scale period, unless explicitly provided for in resolution 55/235.

CHUN YUNG-WOO (Republic of Korea) said his delegation wished to revisit the arrangement made at the fifty-fifth session of the General Assembly concerning his country’s share of the peacekeeping costs.  Resolution 55/235 had stipulated that the Republic of Korea’s share of the cost of peacekeeping operations was to increase five-fold from 20 per cent to 100 per cent of the regular budget assessment over a five-year period from 2001 through 2005.  He also recalled that his country’s agreement had been predicated on the assumption that its average per capita national income level for the six-year period from 1996 through 2001 would exceed the threshold for level B.

His country’s agreement to move up to level B was not meant to be an exception to the underlying principles confirmed in paragraphs 9 and 11 of resolution 55/235, he said.  His country’s agreement to the arrangement contained in paragraph 22 of the resolution three years ago should not be interpreted as an intention to move voluntarily higher that that which corresponded to its national income level.

As the Committee reviews the scale of assessment of the peacekeeping operations expenses for the period 2004-2006, his delegation expected that it would take into account the Republic of Korea’s per capita average national income during the applicable base period 1996-2001, which had turned out to be below expectations, and below the threshold for level B.

MANASVI SRISODAPOL (Thailand) said his delegation agreed with the updated composition of levels of financing of peacekeeping operations as presented in the Secretary-General’s report.  Having subscribed to the principle of collective responsibility in the financing of peacekeeping operations, Thailand had always paid its assessed contributions in full and in a timely manner and expected other Member States to do so in accordance with their obligation.  His delegation noted that the United Nations continued to face a shortfall in its peacekeeping budget arising from unpaid assessments.  Should this situation persist, the United Nations would never be able to overcome its spiralling financial problems.

In that regard, he drew attention to the issue of reimbursement to troop-contributing countries.  The amount owed to troop-contributing countries was projected to be $565 million by the end of 2003.  This debt was unlikely to be resolved unless all Member States fulfilled their financial responsibility to the Organization.

SHINICHI IIDA (Japan) said it was the Security Council that decided whether to establish peacekeeping missions, and his delegation wished to point out that with privilege came responsibility.  The responsibility to pay of the permanent members of the Security Council, not only their capacity to pay, should be taken into consideration when apportioning expenses for the implementation of decisions taken by the Council.

Were the permanent members of the Council bearing a sufficient portion of peacekeeping expenses?  According to the present scale methodology, the permanent members were placed at level A, whereas Japan was at level B, he said.  However, the fact was that Japan’s assessment rate for peacekeeping expenses, being close to 20 per cent, was larger than the total assessment rates of four permanent members of the Security Council.  Based on this system, after the Security Council took a decision, Japan was sent an invoice requesting one fifth of the entire cost of implementing such a decision.

In order for the governments of major financial contributors to continue to pay their share of peacekeeping expenses with the understanding of their taxpayers, it was imperative to establish some form of mechanism for dialogue between the Security Council and major financial contributors.  Japan called on the members of the Council to give this matter serious consideration.  General Assembly resolution 55/235 was important because it had introduced a systematic peacekeeping scale for the first time, he said.  That resolution must be fully implemented with no exceptions.  Any modification would have serious implications for the implementation of resolution 55/5B on the regular budget scale.

PAULETTE BETHEL (Bahamas) took note of the report of the Secretary-General on the peacekeeping scale of assessments.  In particular, her delegation had noted that for the triennium 2004-2006, the Bahamas would move upwards from level “D” to level “B” in the scale.  The Bahamas was a small island developing State and was vulnerable in the areas of defence, environmental disaster, and limited human and economic resources.

The Bahamas had on numerous occasions argued in the General Assembly and other international forums that per capita gross national income should not be given undue weight in determining ‘capacity to pay’ as it often led to distortions.  Nowhere was this distortion more visible than in the case of the scale of assessments for peacekeeping operations, which today found the Bahamas, a small island developing State, in the same category as the most developed economies of the world. 

It was ironic that, while the Bahamas was being called upon to assume a greater share of the financial burden for peacekeeping operations, its economy was facing serious challenges, due to actions that had been promulgated in other international forums, in which the Bahamas was not able to participate.

VLADIMIR A. IOSIFOV (Russian Federation) said the decision on the peacekeeping scale –- like the one on the regular scale of assessments -– was based on a principled obligation by Member States to ensure the viability of the Organization through timely and complete payment of their dues.  Difficult negotiations in the General Assembly in the past had given Member States every opportunity to come up with a compromise on the issue.  He saw resolution 55/235 as a whole, every provision of which should be implemented.  He also proceeded on the understanding that no changes had been made to the methodology for calculating the new scale of assessments.

WANG XINXIA (China) agreed that resolution 55/235 provided the methodology for the apportionment of peacekeeping assessments, assigning 10 contribution levels to Member States.  It had also allowed for a transition period for the countries moving up.  The decision was a result of difficult negotiations made on the basis of agreed methodology and criteria.  Those should be respected as a whole without any exceptions.  She supported the statement of the European Union on the question.

Mr. FARID (Saudi Arabia) said that, according to paragraph 7 of document A/58/157, the gross national income of Member States was averaged for 1996 to 2001.  That was a deviation from the methodology, as the scale of assessments for 2004-2006 should have been calculated on the basis of those six years and the period of 1999-2001.  As a result, Saudi Arabia had been moved from level G to level F, with a significant difference in assessment.  It was imperative that the Assembly adhere to the existing resolutions.  The deviation from methodology was not acceptable to his country, which depended on a sole source of income that could be depleted at some point.

HOWARD STOFFER (United States) highlighted the decision of the General Assembly to leave the scale methodology unchanged until 2009.  His delegation also wished to stress the importance of the full application of all paragraphs of resolution 55/253 without exception.  This principle should be respected as a whole.  Furthermore, all transition rates must be respected.  There was no provision for, nor did the United States agree to, any movement between groups over the course of the next three-year scale period.

Mr. GILPIN, of the Department of Management, responded to a question from Saudi Arabia on data used for the preparation of the table in document A/58/157.  In resolution 55/5B, a provision had been made that the scale of assessment was prepared on the basis of the average result, using base periods of three and six years.  In resolution 55/253, the data used had been for the six-year base period.  The Secretary-General’s report A/C.5/55/38 had indicated that it would follow the same practice as resolution 55/235, but using new data for the six-year base period 1996-2001.

2002-2003 Budget

VLADIMIR BELOV, Chief of the Common Services Unit, Programme Planning and Budget Division, introduced the Secretary-General’s report on the construction of additional office facilities at the Economic Commission for Africa, Addis Ababa.  Updating the information contained in the report, he said that a potential contractor had been identified, and currently a possible contract was being reviewed.  Further progress had been achieved on the land-allocation issue.

SHARON VAN BUERLE, Chief of the Political, Legal and Humanitarian Services, Office of Programme Planning, Budget and Accounts, introduced the report of the Secretary-General on strengthening the United Nations Web site.

Ms. ATTWOOLL (United States) congratulated the Department of Public Information for its efforts to enhance the United Nations Web site, which provided

an excellent example of public information activity that had the capacity to reach wide audiences around the world.  It was also an important tool for the reduction of paper distribution, which was both costly and time-consuming.  The United States supported the linkage of the ODS to the Web site.

Resources freed up from the establishment of United Nations information hubs should, first and foremost, be redeployed to strengthen the multilingual capacity of the Web site and the capacity to provide free public access to the ODS, she said.  In that regard, she noted that one P-4 and six General Service posts were being proposed for inward redeployment to the Website Section from the information centres.

She was pleased that the DPI was aggressively pursuing and enlisting the pro bono assistance of the global academic community in translating documentation, she said.  That was a mutually beneficial relationship that should be utilized and expanded to the extent possible.  The DPI had also encouraged other departments to provide, on a more regular basis, materials in the six official languages.

While, in principle, the United States had no objection to that, she said she would like to remind those involved that the United Nations Web site was a tool and not an official document and that Secretariat staff were only required to know one of the two working languages.  In that connection, she would like to know which departments had requested additional resources in the proposed programme budget to facilitate additional translation and to what extent that would free up resources in the DPI previously dedicated to translation.

On the pro bono study to be conducted concerning the Web site, she said it should take into account the investment in information technology requested in the 2004-2005 budget and its positive effect on the development of the Web site.  Her delegation would also like to be informed how the development of the ODS had led to efficiencies at the United Nations.  Any such efficiencies should be redeployed to finance free access to the ODS for the public.

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