BUDGET COMMITTEE TOLD OF MOVES TO WIDEN MARKETING OF UNITED NATIONS PRODUCTS, BOTH FOR ADVOCACY AND TO GENERATE INCOME

Fifty-eighth General Assembly

Fifth Committee

9^th Meeting (AM)

BUDGET COMMITTEE TOLD OF MOVES TO WIDEN MARKETING OF UNITED NATIONS PRODUCTS,

BOTH FOR ADVOCACY AND TO GENERATE INCOME

Series of Texts Approved on Auditing, Oversight, Related Issues

Possible sales of books and gifts via the Internet and relocation of United Nations bookshops and gift centres to increase their visibility, as well asdistribution of best on-line marketing practices, were among the measures recommended by the Fifth Committee (Administrative and Budgetary) this morning for improving profitability of revenue-producing activities of the United Nations system.

Acting on the report of the Joint Inspection Unit (JIU), the Committee also agreed with its recommendation to identify public information materials with marketable value -- especially audio-visual productions -- that could be purposely developed for the twin objectives of advocacy of the Organization’s goals and income-generation, without affecting existing practices of free distribution of information materials.

At the same time, by the terms of the text recommended by the Committee today, the Assembly would agree with comments of members of the United Nations System Chief Executives Board for Coordination, who emphasized that the potential of the United Nations to generate revenue from publications should be viewed realistically.  The text noted the need for improved inter-agency coordination on publication and dissemination activities, as mentioned in the JIU report.  Also endorsed by the Committee were the paragraphs of the report recommending studying ways of enhancing the visitors’ experience in Geneva and Vienna and operating guided tours, bookstores and gift shops in Nairobi.

The draft resolution on revenue-producing activities was one of eight texts approved by the Committee today without a vote.

By another text, the Assembly would accept the 2002 financial report and audited financial statements of the Board of Auditors, as well as the audit opinion of the Board regarding the voluntary funds administered by the Office of the United Nations High Commissioner for Refugees (UNHCR).  [Without qualifying its opinion, the Board modified it to draw attention to its findings on the inadequacy of assurance obtained by the UNHCR that funds had been properly used for the purpose intended, and on the understatement of $70 million in the disclosure of non-expendable property.  Among its other findings was the fact that, while the official staffing table of the Office included 4,553 posts as of  1 July 2002, the actual staff roster was over 6,600.]

The Assembly would note with concern the shortcomings identified by the Auditors in the management of financial and human resources of the UNHCR.  Noting the efforts to implement the Board’s recommendations so far, it would urge the High Commissioner to continue doing that.  To avoid further depletion of the UNHCR’s reserves, the High Commissioner would be requested to examine the causes of continued operating deficits in order to ensure the Office’s functioning within its income for each financial year. 

Another draft resolution approved today was prepared on the basis of the Joint Inspection Unit report on the management audit review of outsourcing in the United Nations funds and programmes.  By its terms, the Assembly would endorse the Unit’s recommendation aimed at reinforcing existing outsourcing guidelines.  The Secretary-General would be requested to share the experience of the United Nations Procurement Division in the use of its new formats for monitoring, evaluating and certifying supplier performance under outsourced contracts with the membership of the Inter-Agency Procurement Working Group and to report to the Assembly thereon.

Acting on another JIU report –- the one on reforming the Field Service category of peacekeeping personnel -- the Committee also recommended approval of six recommendations of the Unit, including those related to the need to provide a clear definition of the occupational groups, as well as criteria for the identification of staff members to be retained, redeployed, or phased out.

By a draft decision on the JIU’s report on support costs in connection with extrabudgetary activities within the United Nations system, the Assembly would request the Unit to provide clarifications on several of its recommendations and decide to continue its consideration of the matter at the first part of its resumed fifty-eighth session.   

By a draft resolution on the Secretary-General’s outsourcing practices report, the Committee recommended that the Assembly take note of the document and endorse its recommendations regarding information to be included in future reports on the matter.

By another text, recommending that the Assembly take note of the report of the Office of Internal Oversight Services (OIOS) on the audit of mission subsistence allowance rates, the Committee also suggested that the OIOS be entrusted with preparing an updated report on the matter to be submitted during the second part of its resumed fifty-eighth session.

The Committee decided to continue its consideration of the JIU report on common and joint services of United Nations organizations at Vienna, upon the issuance of a related report of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) at its fifty-ninth session.

Also this morning, as the Committee concluded its consideration of a series of reports introduced yesterday, speakers applauded the Oversight Office for the strides it had made in fulfilling its mandate.  However, it was said, there were still too many examples of waste, inefficiency and mismanagement in a number of areas.

Participants in the debate agreed on the need for the Department of Public Information (DPI) to reassess its approach to its information centres, especially in developing countries, where the vast majority of the population had no access to information technologies.

Responding to concerns expressed by several delegations in connection with the audit of the Investment Management Service of the United Nations Pension Fund, the Under-Secretary-General of the Department of Management, Catherine Bertini, pointed out that 21 out of 26 recommendations of the Oversight Office had been implemented.  A global accounting and consulting firm had been engaged in order to see how to proceed.

The Representatives of Nigeria and South Africa stressed the importance of the effective functioning of the Economic Commission for Africa (ECA) and the United Nations Office at Nairobi.  They hoped that the implementation of the OIOS recommendations in that regard would contribute to the positive roles that the Commission and the Office played in advancing the development agenda in Africa.  Some speakers, however, regretted that there had been a 10-month delay in the construction of additional office facilities at ECA.  They stressed the need for all United Nations offices to be treated equally and fairly.

Speakers also highlighted the importance of strengthening the United Nations Web site in all official languages, the main objective being complete parity among the six languages.

Statements were also made by representatives of China, Switzerland, United States, Japan, Morocco (on behalf of the “Group of 77” developing countries and China), Saudi Arabia, Trinidad and Tobago, Sierra Leone, Syria and Italy (on behalf of the European Union and associated States).

The Committee meets again on Tuesday, 28 October, at 9:30 a.m. to begin its consideration of the budget of the United Nations for 2004-2005.

Background

The Fifth Committee (Administrative and Budgetary) met this morning and was expected to take action on 10 draft decisions and resolutions, and to continue its consideration of the activities of the Office of Internal Oversight Services (OIOS) and reports related to the 2002-2003 budget of the United Nations.  (For background information of the reports before the Committee, see Press Release GA/AB/3579 of 23 October.)

Action on Drafts

Having considered the Board of Auditors’ reports, the Committee adopted without a vote a draft resolution (document A/C.5/58/L.7), by the terms of which the Assembly would accept the financial report and audited financial statements, as well as the audit opinion of the Board regarding the voluntary funds administered by the Office of the United Nations High Commissioner for Refugees (UNHER) for the period from 1 January to 31 December 2002.

Noting with concern the shortcomings identified by the auditors in the management of financial and human resources of the UNHCR, it would urge the High Commissioner to continue to implement the Board’s recommendations and request him to report regularly to relevant governing bodies on progress made in that regard, while also noting the efforts to implement the recommendations so far.  Another source of concern addressed by the draft is further depletion of UNHCR’s reserves.  In that connection, the Assembly would request the Commissioner to examine the causes of continued operating deficits in order to ensure the Office’s functioning within its income for each financial year.

Further by the terms of the text, the Secretary-General would be requested to report on the full extent of unfunded staff termination and post-service liabilities in the United Nations, and in its funds and programmes, and to propose measures to fully fund such liabilities.  The Assembly would also take note of several reports on the implementation of the Board’s recommendations and note with appreciation the recommendation to consolidate the reports on the accounts of the United Nations and its funds and programmes into a single report.  All audited organizations would be requested to take all the steps necessary to implement outstanding audit recommendations fully and expeditiously.

Yasser Elnaggar, the representative of Egypt, who conducted the informal consultations on the item, introduced the text.

Also, adopted without a vote by the Committee was a draft on Outsourcing practices (document A/C.5/58/L.4), by whose terms the Assembly would take note of the related report of the Secretary-General.  It would also endorse the recommendations contained in paragraphs 10 and 11 of the report of the Advisory Committee on Administrative and Budgetary Questions (ACABQ).  [Paragraph 10 recommends that the Secretary-General include information on current outsourcing practice at the United Nations Office at Geneva in his next report.  Paragraph 11 requests that in future, whenever an activity is outsourced for reasons of cost-efficiency, the related saving should be indicated.]

By the text, the Assembly would further request the Secretary-General to report to the General Assembly at its next (fifty-ninth) session on the implementation of the provisions of its resolution 55/232 and activities outsourced during the years 2002-2003, including information on the location and type of outsource activities and more detailed reasoning thereon.

The text was introduced by Karen Lock, the representative of South Africa, who conducted the informal consultations on that question.

Another text adopted without a vote was a draft resolution on the report of the Joint Inspection Unit (JIU) on management audit review of outsourcing in the United Nations funds and programmes (document A/C.5/58/L.5), also introduced by Ms. Lock, the representative of South Africa.  By its terms, the Assembly would, having considered the report of the JIU, take note of a recommendation that outsourcing arrangements with commercial suppliers be based on a number of distinctive elements, including that the managerial processes of the service or activity be owned and controlled by the contractor, and that an outsourcing arrangement typically implies a business relationship with a supplier lasting one year or more, as a general rule.

It would also take note of recommendation 2, which suggests that the Organization’s programme managers should restrict the practical use of the term “outsourcing” to contractual relations with commercial vendors.  Also by the draft the Assembly would take note of the Secretary-General’s related comments.  [The Secretary-General says in the addendum to the report that further clarification is needed with respect to recommendation 2, as it seemed to deal only with terminology and did not clearly refer to any preferred course of action to be considered by the organizations of the system.  In view of the many permutations of a contractual relationship, the narrow definition of outsourcing is questioned.]

The Assembly would endorse a paragraph recommending that the Secretary-General reinforce existing outsourcing policy guidelines by incorporating the General Assembly’s policy directives on outsourcing practices contained in resolution 55/232 into the relevant policy documents.

Also by the text, the Assembly would take note of recommendation 4 of the JIU report which asks that the Inter-Agency Procurement Working Group aim to standardize and generalize the application of “due diligence” procedures within the United Nations system, using relevant provision of the United Nations Children's Fund (UNICEF), and the related comments of the Secretary-General, which state that the relevance of this recommendation vis-à-vis the JIU report is not clear.  The Assembly would also note recommendation 5 of the report, which suggests, among others, that the Working Group seek agreement on standard contract provisions, emphasizing cost-effectiveness and efficiency in outsourced operation.

The Assembly would also request the Secretary-General to ensure that contractors whose staff were present on the United Nations premises on a regular basis were held accountable for conducting individual background checks at their own costs.  It would also request the Secretary-General to share the experience of the United Nations Procurement Division in the use of its new formats for monitoring, evaluating and certifying supplier performance under outsourced contracts with the membership of the Inter-Agency Procurement Working Group, and to report to the General Assembly thereon in the context of his next report on outsourcing practices.

By a draft resolution on the report of the Joint Inspection Unit on common and joint services of United Nations organizations at Vienna (document A/C.5/58/L.6), also adopted by the Committee without a vote, the Assembly would welcome the comprehensive and timely preparation of the document and decide to return, at its fifty-ninth session, to its consideration upon the issuance of a related ACABQ report.

The representative of Nigeria, Nonye Udo, who conducted the informal consultations on this item, introduced the text.

The Committee then adopted without a vote a draft resolution related to the report of the Joint Inspection Unit on the revenue-producing activities of the United Nations system (document A/C.5/58/L.8), by the terms of which the Assembly would act on the recommendations contained in that document.  In particular, the Assembly would state that it awaits with interest specific proposals by the Secretary-General in connection with the inspectors’ recommendation on the consolidation of management of revenue-producing activities.  It would also endorse a recommendation on possible relocation of United Nations bookshops and gift centres in New York and Geneva to make them visible and accessible to the general public, staff and delegates in order to increase revenue in the context of strengthened security.

The Secretary-General would further be requested to report on the possibility of operating guided tours, bookstores and gift shops in Nairobi and explore the possibility of selling books and gifts via the Internet, in addition to existing arrangements.  Also endorsed by the text would be the paragraphs of the report recommending study of ways to enhance the visitors’ experience in Geneva and Vienna, and modernizing the Palais des Nations in Geneva towards that end.

The Assembly would agree with the recommendation to identify public information materials with marketable value, especially audio-visual productions that could be purposely developed for the twin objectives of advocacy and income-generation, without affecting existing practices of free distribution of public information materials.  The Assembly would also endorse a recommendation related to emulating best on-line practices as far as marketing of United Nations databases is concerned, while agreeing with the United Nations System Chief Executives Board for Coordination that application of this approach needs to be tailored to specific objectives and circumstances of the organizations concerned.

Also by the text, the Assembly would agree with the Secretary-General’s comments to the JIU recommendations on possible review of the agreement underlining the relations of the United Nations postal service with the host country, and expansion of its contacts with the Universal Postal Union (UPU), looking forward to further proposals in that respect.

[The Secretary-General says in the addendum to the report that while it may certainly be possible to review the terms of the Agreement between the United Nations Postal Administration and the United States Postal Service, it is likely that such a review at this time would yield adverse results for the United Nations.  He goes on to welcome the suggestion in the JIU report that United Nations Postal Administration strengthen its relations with the UPU and its member countries, pointing out that United Nations postal service has participated in most meetings of the World Association for the Development of Philately, established by the UPU.  While this relationship will be further explored and expanded, the United Nations postal service association with the UPU cannot be expected to be on the same footing as that of national postal authorities, because of the absence of an essential principle of reciprocity.]

Finally, the Assembly would agree that competent legislative organs, when considering strengthening policy frameworks for revenue-generating activities in their organizations, should consider drawing on the objectives set out by the JIU in that respect.  In connection with the Unit’s recommendations on United Nations publications, the Assembly would agree with the comments of the Chief Executives Board for Coordination members who emphasized, inter alia, that the potential of the United Nations to generate revenue from publications should be viewed realistically, and noted the need for improved inter-agency coordination on publication policies and dissemination activities, as mentioned in the JIU report.

The draft was introduced by Jerry Kramer, the representative of Canada, who conducted the informal consultations on that question.

A draft decision on the report of the Joint Inspection Unit on support costs in connection with extrabudgetary activities in organizations of the United Nations system (document A/C.5/58/L.3) was before the Committee, by whose terms the Assembly would request the JIU to provide clarifications on several of its recommendations.  It would also decide to continue its consideration of the matter at the first part of its resumed fifty-eighth session.

The draft decision was introduced by the representative of Argentina, Guillermo Kendall, who conducted the informal consultations on this agenda item.  He also introduced a change to the Spanish version of the text.

The decision was adopted by the Committee without a vote.

A draft resolution on the JIU report on reforming the Field Service category of peacekeeping personnel (document A/C.5/58/L.9) was also adopted by the Committee without a vote.  By its terms, the Assembly would take note of the document and the Secretary-General’s related comments.  It would also take note of the related observations and recommendations of the ACABQ and approve recommendations 1 to 6 of the JIU.

[Among the recommendations that would be approved by the Assembly are those related to the need to provide a clear definition of the occupational groups, as well as criteria for the identification of present staff members, who would be integrated into the new Field Service and those who would need to be redeployed or phased out.  The JIU also recommended a full assessment of the training needed to address the shortage of managerial, supervisory and specialized technical skills among the Field Service staff; revision of a parent duty station; a new policy for mobility and rotation; delegation of authority to missions in the field to approve and process entitlements of Field Service officers; and measures to alleviate the strain of Field Service life on individual staff members and their families.]

Mr. Kendall, the representative of Argentina, who conducted the informal consultations on the text, introduced the draft.

The Committee then turned to a draft resolution (document A/C.5/58/L.10) on the report of the Office of Internal Oversight Services on the audit of the mission subsistence allowance rates (document A/56/648), which it adopted without a vote.  By this text, the Assembly would take note of the report and reaffirm its resolution 56/246 on the work of the Oversight Office, particularly its paragraph 8, in which the Secretary-General was requested to ensure full implementation of the Office’s recommendations with regard to the new mission subsistence allowance.  He was also asked to report on the matter in the context of the budget performance reports of the relevant peacekeeping operations.

Further by the text under consideration today, the Secretary-General would be requested to entrust the Oversight Office with submitting an updated report on mission subsistence allowance rates, during the second part of the Assembly’s resumed fifty-eighth session.

The draft resolution was introduced by the representative of South Africa, who also conducted the informal consultations on this question.

Statements on Oversight Office Activities

SUN XUDONG (China) said that the work of the Office of Internal Oversight Services (OIOS) had been effective, with concrete results, and its recommendations were extremely important for all United Nations departments in terms of improving management and efficiency and achieving cost-savings.  The Chinese delegation noted that, among the 789 critical recommendations issued during the year, about 33 per cent had already been implemented.

Continuing, he said he noted with concern the claim by the Office in relation to the waste and fraud it had exposed.  The implementation of the Office’s recommendations by United Nations managers could save the Organization approximately $37 million.  The case mentioned in paragraph 66 of the report was about misappropriation of $4.2 million by a former senior staff member of the United Nations Interim Administration Mission in Kosovo (UNMIK).  As a result of the hard work of the investigators, the money had been successfully recovered, but the case had exposed serious deficiencies in the financial management of UNMIK that needed to be corrected.  The OIOS recommendations on the requisitioning function of the Department of Peacekeeping Operations (DPKO) also deserved serious consideration.

Turning to the implementation, he said the recommendations should not be allowed “to gather dust on the shelf”.  In that connection, he noted that between July 2002 and June 2003, of the 2,737 recommendations of the Oversight Office, 1,384 had been implemented and 592 were in the process of implementation, with a total implementation rate of 50.6 per cent, which would certainly go even higher with the passage of time.  He said the implementation rate of recommendations issued between July 1999 and June 2000 had reached 90.6 per cent.  He believed that once the operational capacity of the United Nations was enhanced with improved management, the number of OIOS recommendations would fall; only by identifying problems and resolving them could the Organization do a better job.  Therefore, he welcomed the OIOS recommendations aimed at improving the work and management of the United Nations.

STEFANIE PFISTERER (Switzerland) welcomed and endorsed the annual report of the OIOS.  She said she was encouraged that about half of all the recommendations had already been implemented and that the Oversight Office had identified potential savings within the United Nations amounting to some $37 million, of which more than $15 million had already been recovered.  The Office had made a number of important recommendations covering a wide range of issues.  Among them, the audit and investigation coverage of the DPKO, the management review of the United Nations Office of the High Commissioner for Human Rights, and the audit of the United Nations information centres (UNICs) were of particular importance to her delegation. 

She said her delegation had followed with great interest the launching of the organizational integrity initiative last May.  She agreed with the Oversight Office on the importance of integrity and professional ethics in the Organization.  Since Member States would gather in Mexico to sign the United Nations convention against corruption at the end of the year, the United Nations must indeed lay stress on its own integrity and corruption control to set a good example.  She was, therefore, pleased to hear of the recovery of $4.2 million that had been misappropriated by a former senior staff member of UNMIK.

She went on to welcome the new approach taken by the OIOS to identify key risk areas in oversight work, and expressed the hope that it would gain acceptance from managers throughout the United Nations.  She said her delegation wanted to express its appreciation for the work of the Office to promote responsible administration of resources, a culture of accountability and transparency, and improved programme performance.

THOMAS A. REPASCH (United States) applauded the OIOS for the strides it had made in fulfilling its mandate.  He particularly noted the development of the risk-management framework to prioritize obligations; the emphasis on integrity -– especially for senior management; and the advocacy for managerial accountability.  However, he added, while his delegation commended the efforts of the OIOS and the Secretary-General, it still found too many examples of waste, inefficiency and mismanagement in a number of areas.  Consequently, it was imperative to realize the remainder of the $37 million in savings recommended by the Oversight Office.

He said the $4 million theft by a senior staff member in the Kosovo Mission had been frightening to read about, and he wished to know how such a crime could elude the individual’s supervisor.  His delegation was also dissatisfied with the decision of the Standing Committee of the United Nations Joint Staff Pension Fund to “fire” the OIOS, and instead establish its own audit section, against the advice of the ACABQ.  Whether or not the Pension Fund had a separate audit group, the OIOS by mandate would remain responsible for providing oversight of the resources and staff of the Organization.  His delegation would pursue this matter in future discussion.

He said his delegation had also been dismayed to read that a former representative of the Secretary-General illegally solicited at least $500,000 from donor countries, and falsified mission subsistence allowance claims to the tune of at least $380,000.  What safeguards had been put in place to ensure that such misbehaviour did not occur in the future? he asked.  There should be a clear explanation of the Secretariat’s position.

He said the OIOS had urged managers to take ownership of their work, which must include holding managers accountable for their work.  The United Nations must strengthen evaluation mechanisms and provide a tangible link between resources requests, on one hand, and outcomes, on the other.

KAREN LOCK (South Africa) said that the large number of OIOS reports, the wide range of issues covered, and the potential cost-savings and recoveries identified by the Office in the amount of almost $37 million bore testimony to its effectiveness.  Her delegation took note of the increases in the number of recommendations that the Office had issued during the period under review in comparison with preceding years.  Also, the number of critical recommendations had increased from 549 in 2000/2001 to 748 in 2001/1002, and to 789 in the 2002/2003 review.  Those figures were still too high, and her delegation wished to appeal to relevant OIOS clients to implement the recommendations without delay.  She said she was encouraged, however, by the statistics which demonstrated that the majority of critical recommendations for the three preceding periods had been implemented.

South Africa attached great importance to oversight activities and recommendations of the OIOS, she said.  It continued to view with great concern the findings that pointed towards instances of sexual abuse and exploitation, poor cash management, unreliable accounting practices, inadequate record-keeping of mission equipment, poor controls over accounts and non-compliance with procurement guidelines.  Remedial action should be taken.  Her delegation also viewed as essential the effective functioning of the Economic Commission for Africa (ECA) and was confident that implementation of the OIOS recommendations would contribute to the positive roles that the Commission and the Office played in advancing the development agenda in Africa. 

Turning to the review of UNICs, she said that it was timely and would be useful for the consideration of the item in the future.  She noted with concern, however, the apparent inequity between the information centres in developed and developing countries.  Those in developed countries, where there was easy public access to the Internet and library facilities, needed a different managerial approach from those in developing countries.  The Department of Public Information (DPI), in implementing the recommendations of the OIOS, should ensure that information about the United Nations was effectively distributed within countries, while taking their unique needs into account.

SHINICHI YAMANAKA (Japan) said that his country attached great importance to the oversight functions, including evaluation, audit, inspection, investigation and implementation-monitoring.  It welcomed the annual report of the OIOS and the strategy described there.  He said he noted with interest the approach of risk-based work planning, by which the Office identified and prioritized those areas that were considered to have the greatest vulnerability to fraud, waste, abuse, inefficiency and mismanagement.

He said that as results-based budgeting was particularly relevant today, the commitment and accountability of programme managers were of great importance.  The backlog of the cases to be investigated was highly undesirable, and he hoped that a number of new posts currently approved would expedite the investigation and reduce the backlog.

On the audit of the functioning of the Headquarters Committee on Contracts, he said that the recommendations of the OIOS would greatly contribute to improving the function of that body.  It was satisfying that most of the recommendations had been accepted by its management and Chairman.  It was necessary for the OIOS and management continue to consult on the organizational placing of that committee.  The issue of reviewing the threshold for the Contracts Committee as far as procurement cases was concerned needed to be carefully considered by management, taking into account both the aspect of practicality/efficiency and the mandate of the Committee.

Turning to the review of UNICs, he said that the concept of regional hubs was a valid one.  At the same time, in considering a system of regional hubs it was important to weigh what would be lost by closing existing information centres against the merits that would be created through reinforced activities.  Overall support of a host government should be fully taken into account, rather than focusing on particular elements.  As stated in resolution 57/130, “information in local languages has the strongest impact on the local population”.  Therefore, the DPI should continue its public information activities in various languages.

He went on to commend the OIOS for its report on the review of duplication and bureaucracy in the United Nations administrative processes, which provided a number of valuable observations and recommendations.  Recalling the Office’s findings that the administrative environment of the Secretariat did not fully leverage the advantages of technology, he said that he failed to understand, having invested a large amount of money in information technology, why those investments were not reflected in administrative processes.  Recommendations to rationalize the travel process, procurement and staff entitlements were very sensible.  He also agreed with the OIOS that recommendations were related to larger issues, namely, the need to adopt an “enterprise-wide approach” to the use of information technology in automating processes and to put policies in place that would hold staff accountable.  Those recommendations, if fully implemented, would lead to substantive savings to the Organization.  He fully agreed that there was a need to redefine the role of the executive office and the administrative offices in departments.

Finally, addressing the report on the audit of the Investment Management Service of the Staff Pension Fund, he expressed concern over the alarming cases of structural and organizational inadequacy identified by the Oversight Office, including the lack of an adequate supervisory framework, excessive concentration of investment responsibility, and lack of monitoring of contract compliance or review of vendor performance.  He said he was particularly concerned over the situation concerning the use of non-discretionary investment advisers.  Given the social security nature of the Pension Fund, the observations of the OIOS on that matter had to be carefully reviewed by the Fund.

AICHA AFIFI (Morocco), speaking for the “Group of 77” developing countries and China, said it was important for the United Nations to have internal oversight mechanisms, and thanked the OIOS for its recommendations.  It was up to the programme directors and officials to make the best possible use of those recommendations.  The risk-management system initiative implemented by the OIOS was a positive step forward; however, it could contribute to the effectiveness of the Office only if it were applied with a certain discipline.

She said her delegation welcomed the coordination between the OIOS, the Joint Inspection Unit and the auditors committee.  It remained convinced, however, that this coordination could be beneficial only if it could avoid the duplication of tasks and the overlapping of activities.

Turning to the format of the OIOS report, she asked why the Office had not used the format that had been specified by General Assembly resolutions.  And, why did it continue to verify the United Nations compensation process as a whole when some aspects of this process did not come under the responsibilities of the Office?

NONYE UDO (Nigeria) said the strategic initiatives undertaken by the OIOS to instil a management culture based on integrity, accountability and transparency for the attainment of desired results were to be applauded.  To that end, her delegation was pleased that, as of August 2003, more than 50 per cent of all recommendations issued by the Office had been implemented.  It was a matter of concern, however, that in some instances there was neither an indication as to the acceptability of the OIOS recommendations, nor any attempt to implement them.  While the UNHCR had responded in a timely manner in certain areas, they were yet to react in others.  It was important that OIOS recommendations be addressed with the seriousness they deserved.

She said there was no doubt that the DPI needed to reassess its approach to its information centres, particularly those in developing countries, where the vast majority of the population had no access to information technologies.  The DPI was one of the three pillars identified by Member States to help with the implementation of the New Partnership for Africa’s Development (NEPAD).  Any restructuring of the information centres should, therefore, be carried out in such a way as to enable the United Nations offices to carry out their mandated activities.

AHMED FARID (Saudi Arabia) commended the efforts of the OIOS to enhance efficiency and productivity of the United Nations.  His delegation urged the programme managers to implement fully the outstanding critical recommendations, which amounted to 67 per cent of the total.  The managers should also be fully involved in the development of the plans for their programmes and take ownership of the objectives, expected accomplishments and indicators of achievement.

RAJIV RAMLAL (Trinidad and Tobago) supported the work of the Oversight Office in the context of its mandate, inter alia, to assist the Secretary-General in his efforts to improve the efficiency and effectiveness of the Organization.  He also recognized with appreciation its efforts to strengthen integrity and improve accountability within the Organization through its integrity initiative.

While expressing appreciation for the efforts of the Office to promote the culture of accountability within the United Nations, he said he nevertheless wondered if the OIOS were best placed to promote results-based management, in the context of its mandate as an internal audit and investigation body.  That remark was not intended to dissuade the Office from undertaking self-monitoring and evaluation efforts, but touched on the larger issue of how the Secretary-General, and indeed the Assembly, could best pursue the implementation of results-based budgeting and management.  Could a culture of results-based management and the goal of having managers take full ownership of objectives, expected accomplishments and indicators of achievement, be optimized solely through an oversight body? he asked.

He said that perhaps a greater focus of the OIOS on its immediate work programme should be in ensuring a greater success rate of the implementation of its recommendations, including critical ones.  There should also be a better division of labour and avoidance of overlap in the work of the Joint Inspection Unit, the Board of Auditors and the OIOS.

JAMES JONAH (Sierra Leone) said any organization that could save the United Nations $36 million had already done its job.  Reading through the reports of the OIOS, he was not too surprised by its findings, but there was an area that had caused him great concern –- the violations committed by staff members.  How were such individuals able to exist within the system and when had they been recruited?  This question should be brought into focus.

Regarding information centres in developing countries, he said they played multiple, important roles, particularly in terms of documentation for students.

NAJIB ELJY (Syria) paid tribute to the efforts of the OIOS in producing its report.  He regretted, however, that many recommendations on savings and use of resources had not been implemented.  He said was also concerned that $4.2 million had been embezzled from UNMIK.  That raised many questions about accountability in the management of the United Nations, which must be accorded due priority.

He said his delegation had closely examined the report on the structure and functions of UNICs and was disappointed that it had tilted towards developed countries.  Developing countries, who were really in need of such technologies, had not been accorded enough priority.  Finally, he said, he supported the comments of other delegations and stressed the importance of the OIOS remaining within its specified mandate.

Under-Secretary-General, Office of Internal Oversight Services, DILEEP NAIR, responded to a question on the number of people within the United Nations who had committed offences.  He said the United Nations was a large organization, with 9,000 staff in the Secretariat alone, and large amounts of money were being handled.  Given that situation, it was certain that there would be cases of people going beyond the rules and regulations.

It was important to bring such cases to light as soon as possible, not to allow them to go undetected, and to prevent the trend from escalating.  That was something that the OIOS was examining.  In was particularly important to look at preventive measures, and the organizational integrity initiative had been launched for that reason.

On a question as to why certain matters had gone undetected for some time, he said that those matters sometimes came to the attention of the OIOS because people in the related departments had brought them to its attention.  It was not realistic to have 100 per cent oversight, but it was realistic to implement measures to reduce and to deter such cases.

Explaining why the person who had committed fraud at the ICTR was still there, he said that he also had questioned the matter.  It was being looked into.  To retain such a person was the wrong signal to give to the United Nations.

Discussing the format of the OIOS report, he said it was not making recommendations to Member States to act upon; therefore, the recommendations were not in bold face, as was required by a standing General Assembly resolution.

With regard to observations that certain areas of the Compensation Commission were outside of the OIOS mandate, he replied that the OIOS should audit all processes leading up to the decisions on the claims themselves, in order to protect the United Nations and its assets.

Review of Efficiency

ROBERTO MARTINI (Italy), for the European Union, said the Union attached great importance to the investments of the United Nations Joint Staff Pension Fund, and how they were conducted.  He noted with concern that up to $6.5 billion of the North American equity portfolio -– about 30 per cent of the Fund’s total investments -– were managed without adequate responsibility sharing.  That was an excessive concentration of investment responsibility.

Another point of concern was the use of non-discretionary investment advisers by the Investment Management Service.  That service had cost the Fund $15.2 million for the biennium 2001-2002, and the Oversight Office had found no evidence that it had added significant value in terms of the Fund’s equity transactions.  Moreover, as the OIOS had pointed out, there were no comparable examples in investment industry practices of managers who had at their disposal both “full-service” brokers and non-discretionary advisers in executing individual investment transactions.  The European Union members asked that that practice be thoroughly reviewed.

On the question of developing a code of ethics for staff involved in investment management, he said he agreed with the OIOS on the need to follow the same approach taken on by the investment industry, where ethical codes of conduct were normally adopted for staff performing the same functions. 

Responding to comments from the floor, CATHERINE BERTINI, Under-Secretary-General, Department of Management, said that there had been a lot of progress as far as the management of the Investment Management Service of the United Nations Pension Fund was concerned.  Her predecessor had accepted most of the conclusions of the OIOS audit, and after she had taken over on 1 April, she had reviewed the situation.  It was important to see how the recommendations of the OIOS were being implemented, and she engaged a global accounting and consulting firm Deloitte and Touche, in order to see how to proceed.  While the recommendations of the OIOS did not indicate a collapse of procedures or controls, the Office had identified some real gaps in the processes.  Many of the recommendations pointed to the fact that the requisite technology was not in place to “set audit trails and identify trends”.  It was also to take into account that the United Nations Pension Fund was unique, compared with other funds.

In total, she said the OIOS had issued 29 recommendations, three of which were later withdrawn, she said.  It appeared that the Investment Management Service had implemented 21 of the 26 recommendations, including all the recommendations related to procedures and controls.  The recommendations on overall governance, many of which extended beyond the scope of the investment Service itself, still needed serious attention.  She was instituting a two-track approach to review both the oversight and management of the Service.  The review included re-evaluation of Board resolutions, looking at the roles of the constituents, overall investment strategy, and asset allocation.  On the last two, she was very involved.  Also, the Investment Management Service was in the process of management change, since its Director had reached mandatory retirement age in September. She was sure that the Organization would be able to find a very good candidate. 

Mr. REPASCH (United States) thanked Ms. Bertini for providing a summary of actions under way in response to the audit.  He said he would, however, like her to further elaborate on two of his country’s concerns.  As indicated in his delegation’s statement yesterday, the audit had found no evidence that non-discretionary investment advisers added any significant value to the work of the Service.  He wanted to know if those advisers were still retained.  His delegation also attached great importance to the development of a code of ethics for the Investment Management Service, and he would like to know if the Secretary-General still believed there was no need for a specialized code of ethics in this case.

Ms. BERTINI replied that she was aware of the comments by delegations.  First of all, she did not think it was fair to suggest that the Secretary-General felt there was no need for a code of ethics.  The issue had simply not been addressed.  The matter had been brought up by Deloitte and Touche, which had a code itself.  The United Nations would have a very strong code of ethics, but it did not have one at present.  It would be done.

As for the non-discretionary investment advisers, she said that they had contractual relations with the investment Service, and in the course of the review an assessment would be made whether their advice was useful.  However, the Organization did need their advice.  What was needed was an assessment whether the money paid to them was realistic and whether their services were cost-effective.  That would be part of the review. 

Mr. YAMANAKA (Japan) noted that the design work for the construction of additional office facilities at the Economic Commission for Africa (ECA) had been delayed by 10 months.  He said his delegation understood that the Secretariat had taken the best option under the circumstances and that no additional costs were expected.  The Secretariat should continue its efforts to proceed with this project.

Touching upon the United Nations Web site, he said the report on the matter had referred to multilingualism.  Japan’s perception on multilingualism in the context of public information activities was that it should not be limited to the United Nations official languages, and his delegation attached importance to establishing public information activities in various languages.  Furthermore, his delegation was of the view that any additional expenditures for enhancing the United Nations Web site should be conducted through redeployment.

Mr. FARID (Saudi Arabia) said that activity of the Arab Web site had increased substantially and, therefore, required additional resources.  The upkeep of the Arab Web site required a great deal of effort especially when it came to translating documents.  He stressed the importance of strengthening the Arab Web site.

Ms. UDO (Nigeria) expressed dissatisfaction that there had been a 10-month delay in the initial building of the construction of additional office facilities at ECA.  There was a need for all United Nations offices to be treated equally and fairly, and her delegation did not understand how companies that had been deemed to be poorly qualified had sailed through the initial vetting process.  Now that the initial rebuilding had been completed, how did the Secretariat intend to proceed? she asked.  Would the work be on schedule or would there be another delay in completion of the building?

HAO BIN (China) said that with the establishment of the United Nations Web site in all official languages, the general public now had an effective tool to access information about the Organization directly and quickly.  He thanked the Secretariat for the launching of the Chinese Web site, which would increase the influence of the United Nations in China.  Regrettably, full parity among the languages was yet to be achieved.  The Chinese Web site was experiencing weak capacity and shortage of material.  The resolution adopted on the matter during the last session had requested the Secretariat to enhance parity through redeployment of human and material resources.  Work should continue to increase capacity in all the official languages, particularly in Chinese.

Mr. ELJY (Syria) said that his delegation supported strengthening the DPI to support the United Nations Web site in all official languages of the United Nations.  The main objective here was complete parity among the six languages.  He noted with satisfaction that the site was becoming more popular, primarily due to multilingualism, which made it an important and useful gateway to publicize the goals of the United Nations.  That achievement confirmed the need to provide the necessary resources to that activity.

Continuing, he expressed satisfaction that documents were now published in all the official languages on the Official Document System (ODS).  Despite all the efforts by the DPI, the balance with respect to pages published through the site still had to be achieved, and that had impact on the equality in different languages.  The Arabic page still required improvements.  He found it strange that one or two staff members were carrying out that work.  It was necessary to provide additional human and material resources to the Web site, and he encouraged the DPI to request greater resources to strengthen it, so that it could operate on an equal footing with all the languages of the United Nations.

In response to questions on ECA office construction, VLADIMIR BELOV, Chief of Common Services Unit, Office of Programme Planning, Budget and Accounts, said the unexpected outcome of initial bidding had caused the delay.  Ten companies had responded to the re-bidding invitation.  The issue of granting the contract was now in its final stage.  He did not expect any further delays.  The revised project schedule was contained in the report before the Committee.  As for the funding, the Assembly had approved the budget for the project, and the funds were reserved for the construction.  Construction would proceed with full funding available in the account.

Ms. UDO (Nigeria) said that, according to paragraph 8b of the report on the construction of the additional office facilities, the preparation and design of construction documents was supposed to be under way.  Had that process been started and, if so, how far had it progressed? she asked.

Mr. BELOV replied that the work under paragraph 8b had started.  The work on the preparation of construction documents should be completed by May 2004, and there was no indication that there would be a delay in this matter.

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