SECRETARY-GENERAL WILL PRESENT BUDGET FOR 2004-2005 TO FIFTH COMMITTEE TUESDAY, 28 OCTOBER

SECRETARY-GENERAL WILL PRESENT BUDGET FOR 2004-2005

TO FIFTH COMMITTEE TUESDAY, 28 OCTOBER

Secretary-General Kofi Annan will present his budget proposal for 2004-2005 to the Fifth Committee (Administrative and Budgetary) on Tuesday, 28 October.

In forwarding his $3.058 billion budget proposal to the Assembly (documents A/58/6, Introduction and Sections 1-35, Income Sections 1-3 and sect.3, corr.1), the Secretary-General characterizes it as “a strategic document focusing on objectives and results”, which constitutes a solid basis for deliberation by Member States on the purpose, plan of action and role of the United Nations for the biennium 2004-2005.

Outlining the rationale behind his agenda for further change in his annual report this year (document A/58/1), the Secretary-General stressed the need to align the activities of the Organization with the priorities identified by the General Assembly in the medium-term plan for 2002-2005 and agreed upon at the Millennium Summit and the global conferences.  Towards that end, during the first half of the year, major efforts were made to ensure that the budget for 2004-2005 reflected that priority challenge.

The proposed budget outline, which was approved at the end of last year, was prepared on the basis of the main priorities for the coming biennium as outlined in the medium-term plan for 2002-2005, which provides the policy framework for the budget.  The priorities include:  the maintenance of international peace and security; the promotion of sustained economic growth and sustainable development; the development of Africa; the promotion of human rights; the effective coordination of humanitarian assistance efforts; the promotion of justice and international law; disarmament; and drug control, crime prevention and combating international terrorism in all its forms and manifestations.

Without significantly changing the nature and scope of work carried out by various departments and offices, the proposal places more emphasis on the delivery of results within each programme.  To achieve that goal, the budget proposal envisions a range of measures to realize more efficient and effective utilization of resources, including structural reorganization, redeployment of post- and non-post resources, streamlining procedures, issuing guidelines, purchasing the most suitable types of equipment, and improving project design.

The second budget submitted in a results-oriented format, the document places increased emphasis on achieving results by enhancing performance measurement.  The proposal is significantly shorter than in previous years and has been formulated with a view to meeting the priorities, objectives and mandates set by Member States.

Before recosting, the proposed budget amounts to some $2.91 billion, with the following distribution by budget part:

Budget Part						2002-2003 revised appropriation					Change								2004-2005 resources (before recosting)
										Amount					Per centage
	I.		Overall policy-making direction and  coordination		521 221.7				954.7				0.2				522 176.4
	II.		Political affairs		349 886.8				(19 735.3)					(5.6)				330 151.5
	III.		International justice and law		62 070.4				790.1				1.3				62 860.5
	IV.		International cooperation for development		287 256.5				14 843.4				5.2				302 099.9
	V.		Regional cooperation for development		352 410.8				8 797.0				2.5				361 207.8
	VI.		Human rights and humanitarian affairs		142 388.4			8 266.3					5.8				150 654.7
	VII.		Public information		147 107.6				3 030.5				2.1				150 138.1
	VIII.		Common support services		451 342.1				31 433.4				7.0				482 775.5
	IX.		Internal oversight		20 946.6				466.7				2.2				21 413.3
	X.		Jointly financed administrative  activities and special expenses		85 845.2				6 567.9				7.7				92 413.1
	XI.		Capital expenditures		88 341.1				(35 871.8)					(40.6)					52 469.3
	XII.		Staff assessment		368 936.5				(4 515.4)					(1.2)					364 421.1
	XIII.		Development Account		13 065.0				-				-						13 065.0
		Total		2 890 818.7			15 027.5					0.5				2 905 846.2

After recosting, which involves adjusting the budget figure to account for inflation and currency exchange rate fluctuations, proposals amount to $3.058 billion at preliminary 2004-2005 rates.  In accordance with the established practice, the proposed budget will be recosted again prior to its adoption by the Assembly in December.

Under the proposal, the overall real growth in resources would amount to just 0.5 per cent (or some $15 million net), with priority programme growth largely funded through reallocation of resources.  Out of the 244 subprogrammes in the budget, 182 would grow by a total of some $115 million, and the remaining 62 would be reduced by $100 million.  Out of the 9,062 posts in the current budget, 810 have been proposed for redeployment within or between sections.

Budget sections showing positive growth have rates ranging from 41.6 per cent for section 11, United Nations support for the New Partnership for Africa’s Development, to 1.7 per cent for section 12, Trade and development.  The remaining budget sections reflect either no growth or negative growth rates, ranging from zero growth in respect of sections 23, Programme of Technical Cooperation, and 35, Development Account, to negative 40.6 per cent for section 33, Construction, Alteration, Improvement and Major Maintenance.

The proposal envisions reorganization of two major departments -- the Department for General Assembly and Conference Management and the Department of Public Information -– as well as the establishment of a strategic planning capacity in the Department of Economic and Social Affairs and measures to strengthen management of the Office of the High Commissioner for Human Rights and increase investment in support to human rights at the national level.  Also addressed is the need to provide additional investments for staff training and information technology.  The Secretary-General proposes increasing training resources by $2 million.  Estimated resource requirements for information and communication technology in 2004-2005 amount to $192.4 million –- a proposed increase of $30.4 million against the revised appropriation for the current biennium.

Estimates of income for the biennium 2004-2005 amount to $407.3 million, compared with estimates of $414.4 million for 2002-2003 — a decrease of $7.1 million.  The projections of extrabudgetary resources total $4.22 billion, including some $700 million for support activities, $1.24 billion for substantive activities and $2.28 billion for operational activities.

Prior to its submission to the Fifth Committee, the budget proposal was reviewed by the Committee for Programme and Coordination (CPC) in June-July 2003 and the Advisory Committee on Administrative and Budgetary Questions (ACABQ) from May to June 2003.  These two bodies deal with the programmatic and financial aspects of the budget, respectively.

This year's report of the Committee for Programme and Coordination (CPC) (document A/58/16) recommends approval of the narratives of most sections of the budget, with some modifications.  In particular, with regard to section 14 (Environment), the CPC recommended that a revised fascicle be issued, reflecting the decisions of the Governing Council of the United Nations Environment Programme (UNEP).  Also recommended for review during the current session was section 24 (Human Rights).  The CPC took note of the narrative of section 28 (Public Information) and recommended that the Assembly further consider the section, taking into account its recommended modifications.  The Committee also recommended further consideration of proposals on discontinuation of the Repertory of Practice and integration of the secretariats of the Fifth and Sixth Committees into the Department for General Assembly and Conference Management.

With a shorter and more strategic presentation of the budget mandated by the Assembly, the Committee paid particular attention to programme performance and evaluation in the context of results-based budgeting, making suggestions aimed at further improving the new format.  While welcoming the introduction of baselines and targets to measure performance, the Committee noted that many of the objectives, expected accomplishments and indicators of achievement were very general and not amenable to measurement, however.

Among the Committee’s recommendations is a request to the Secretary-General to make proposals on better alignment of programme performance and evaluation reporting with the budget cycle.  The Committee emphasized the importance of compliance by all programme managers with the Organization’s financial rules and regulations and requested that obsolete outputs be further identified for possible discontinuation in the consideration of the budget during the current session.

In a related report (document A/58/7), the Advisory Committee on Administrative and Budgetary Questions (ACABQ) recommends a total gross appropriation of some $3.02 billion (compared with almost $3.06 billion proposed by the Secretary-General), identifying a number of possibilities for adjustment.

Overall, the Advisory Committee’s recommendations would result in a reduction of $41 million after recosting.  Recommendations on posts and reclassifications would lead to a reduction of $12.5 million.  Another $12.5 million would be saved as a result of an adjustment to vacancy rates.  In most cases, the ACABQ did not support additional General Service posts, as it finds their current percentage (almost 60 per cent) too high, particularly in view of significant investments in information and communication technology.  Additional Professional posts were recommended only in those cases where every effort had already been made to accommodate additional requirements through increased productivity or redeployment.

The recommendation to apply a computer replacement cycle of four years instead of the current three years should lead to savings of some $2.3 million.  The ACABQ also advocates greater efforts to control travel expenditure and recommends reductions in the amounts requested for consultants, general operating expenses, furniture and equipment.

As far as post requirements are concerned, the Advisory Committee suggests managing the Secretariat staffing table as a whole, keeping the grade level of posts under constant review.  With departments and offices not “owning” posts at particular grade levels, such an approach would involve exchanges of posts among various units, and, consequently, sections of the budget.  The Committee recommends refining the Secretary-General’s authority to reclassify posts from G-1 to G-6 and from P-1 to P-5, provided that the overall number of posts in each grade does not change. This would generally mean that each upward reclassification would have to be offset by a downward reclassification of another post or that posts would be exchanged.

In some cases, reform, streamlining or introduction of technologies could lead to the release or abolition of posts, the Advisory Committee points out.  Training of staff, for which considerable resources are spent, could also lead to strengthening the capacity of the Organization.  Where tasks and projects can be completed within a finite time frame, the resources could also be redeployed or discontinued.  Therefore, it is imperative to clearly define the time frame for the completion of projects and tasks.

Many of the Advisory Committee’s comments are directed at results-based budgeting.  Expressing appreciation for the improvements made, the ACABQ stresses the need to continue efforts to shift the emphasis from inputs to results and accountability for their achievement.  The Organization still does not possess either an effective mechanism to monitor, evaluate and measure the impact of the programmes, or the necessary financial link to those activities.  Currently, there is also no consistent standard for formulating and presenting outputs, and a link should be made between expected accomplishments and the cost of related outputs.

The Advisory Committee also recalls that, when approving the budget for the current biennium, the Assembly reduced non-post resources by $52.4 million.  The 2004-2005 budget proposal, pursuant to resolution 57/280, includes an amount of $29.8 million (before recosting) for limited restoration of resources pertaining to information technology ($16.4 million) and the common services facility infrastructure ($13.4 million) across a range of budget sections.  Having considered this proposal, the Advisory Committee recommends full restoration of the cuts in respect of information and communication technology.  As for the common services infrastructure, the ACABQ has recommended reductions totalling $7.5 million as, in many cases, it found no convincing evidence of, or even reference to, the necessity for restoration. 

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