MORE STREAMLINED, FLEXIBLE BUDGETARY PROCESS NEEDED, SAY SPEAKERS IN FIFTH COMMITTEE DEBATE

Fifty-eighth General Assembly

Fifth Committee

18^th Meeting (AM)

MORE STREAMLINED, FLEXIBLE BUDGETARY PROCESS NEEDED,

SAY SPEAKERS IN FIFTH COMMITTEE DEBATE

As the Fifth Committee (Administrative and Budgetary) continued its consideration of measures to strengthen the United Nations system, speakers addressed the need to improve the current process of planning and budgeting which they said was complex, protracted and rigid.

Responding to proposals contained in the Secretary-General’s report, which include an improved medium-term plan, an interlinked and expanded budget outline, and the enhancement of the role of the Committee for Programme and Coordination (CPC), Member States stressed that the priorities agreed upon by Member States must be the foundation for the streamlined budgetary process.

In that regard, Peru’s representative, speaking on behalf of the Rio Group, said that improved identification and budgeting of expected results, together with a better understanding of the documents and reduced expense of the bureaucratic procedures, was needed.  The main characteristic of the new mechanism must be its flexibility, which would allow it to adjust to changing realities.  The Rio Group believed that greater autonomy of the Secretariat depended on the development of mechanisms of control and accountability.

The time had come, said the representative of Italy, speaking on behalf of the European Union, for a frank appraisal of how all the existing budgetary structures served the needs of Member States.  The United Nations must be open to ways to improve the mechanisms, so as to ensure that lessons were being learned and that the Organization was not simply entrenching historically derived differences between various regions or interests represented in the General Assembly, he said.

Turning to the Medium-Term Plan, representatives stressed that it should not be a mere shopping list of actions.  Instead, it should address policy issues vital for fulfilling the mandates of the Organization.  It should spell out targets and allocate resources in the medium term that would help the United Nations to fulfil its long-term goals.

As the report of the Joint Inspection Unit had pointed out that the cost of the budgetary process for the biennium had exceeded $20 million, some speakers highlighted the need to minimize the cost of budgeting and improve its effectiveness.

As the Fifth Committee concluded its consideration of the United Nations common System, Agostino Paganini, Chairperson of the Global Staff Association of United Nations Children's Fund (UNICEF), delivered a statement on behalf of the Coordinating Committee for International Staff Unions and Association of the United Nations, spelling out the staff position on the security of staff, the review of the pay and benefits system, mobility, hazard pay, and contractual agreements.

Also this morning, Liolelito Berridge, Officer-in Charge for the Policy Coordination Unit, Office of Programme Planning and Budget Division, introduced the report of the Secretary-General on administrative and budget implications of the International Civil Service Commission (ICSC) decision on the increase of hazard pay for locally recruited staff.

Also participating in the debate this morning were the representatives of Morocco, on behalf of the “Group of 77” developing countries and China, Nepal, Russian Federation, China, and Cuba.  The Assistant Secretary-General for Programme Planning, Budget and Accounts and United Nations Controller, Jean-Pierre Halbwachs, responded to comments and questions from the floor.

The Committee will meet again at a date to be announced.

Background

The Fifth Committee (Administrative and Budgetary) was expected to conclude its consideration of the United Nations common system and proposed improvements to the current planning and budgeting process.  For summaries of the documents before the Committee, see Press Release GA/AB/3586 of 31 October.

The Committee was also scheduled to take up administrative and financial implications of the decisions of the International Civil Service Commission (ICSC), which were presented in the Secretary-General’s statement contained in document A/58/378.  The document explains that annual financial implications of the Commission’s decision to increase the level of hazard pay to locally recruited staff from 20 to 30 per cent of the midpoint of local bases salary scales, effective 1 January 2004, have been estimated at $2.7 million.  For the regular budget of the United Nations, they would amount to $887,000.  For 2004-2005, related costs arising from the modification of the benefit would amount to about $1.77 million.  These requirements will be accommodated within the common staff costs provision in the proposed programme budget currently before the Assembly.

The Advisory Committee on Administrative and Budgetary Questions (ACABQ), in a related report (document A/58/7/Add.2), recommends approval of the Secretary-General’s recommendation to accommodate the additional requirement of $1.774 million from within the common staff costs provision in the proposed programme budget for the biennium 2004-2005.

Statements

AICHA AFIFI (Morocco), speaking on behalf of the “Group of 77” developing countries and China, commended the efforts of the Secretary-General at strengthening the United Nations system.  The Group would continue to approach the budgetary reform process in a constructive way with a view to improving effectiveness and efficiency, she said, and stressed that reform should be dealt with in a comprehensive and transparent manner.  The Group requested clarification with regard to the evolution of the Secretary-General’s proposals on improving the current process and planning of budgeting detailed in report A/57/357.  Clarification should also be provided on measures being taken to improve programme performance.  Additional information should be given on the different stages of the planning of the budgetary process, such as the medium-term plan and the budget outline.

The Group stressed that priorities should not be set by resources; they should be based on legislative mandates, she said.  In that regard, resources should be commensurate with mandated programmes and activities.

MARIA ARCE DE GABAY (Peru), speaking on behalf of the Rio Group, said that in making improvements to the current process of planning and budgeting, it was necessary to identify the processes that were important for Member States and could improve the efficiency of the United Nations.  The results of that restructuring would determine the offices responsible for each process.  The legislative ordinances and priorities agreed upon by Member States must be the foundation for the budgeting and planning process.  Nevertheless, of great interest to all was improved identification and budgeting of expected results, together with a better understanding of the documents and the reduced expense of the bureaucratic procedure.

Continuing, she said it was true that, since the application of results-based budgeting, the Organization had undergone a metamorphosis -- and she was glad to see the effect achieved -- but several important activities were not easily quantifiable within the format of the current budget.  The system, therefore, must be revised.  It was necessary to update the planning and budgeting processes.  The main characteristic of the new mechanism must be its flexibility, which would allow it to adjust to changing realities.  The Rio Group believed that a greater autonomy of the Secretariat depended on the development of mechanisms of control and accountability.

Regarding the medium-term plan, she agreed with the criticism in paragraphs 7 and 9 of the report, but it was equally important to highlight the fact that the existence of a medium-term plan provided a measure of assurance that actions to address new challenges would not be taken at the expense of actions that continued to be necessary.  The United Nations needed a strategic planning tool that would outline the guidelines for the medium term.  Upon making clear that a plan was necessary, the most convenient format must then be found.  Initially, she favoured a plan that would cover a shorter period of time and be more concise.  The detailing of activities could be studied in the context of the programming considerations of the budget.  As for the budget outline, the proposal in paragraph 23, referred to in the expansion of the outline of the budget, was helpful, but a greater detailing on how that mechanism would be implemented was needed.

Turning to the issues of supervision and evaluation, she agreed with the Advisory Committee that little time was given to evaluating the results obtained at the end of the period.  The fault lay with the lack of efficient mechanisms to evaluate results.  It was also difficult for some delegations to follow all subjects and that, in turn, created inequality in terms of opportunities for participation.

It was also necessary to decide whether the Committee for Programme and Coordination (CPC) should be in charge of the programmes, or if they should be left to the Fifth Committee.  While it was difficult to agree on the matter, it was necessary to at least agree to examine that body’s obligations.  In any case, the CPC must have a greater supervisory role.  With regards to its composition, there was practically an agreement that it must be reviewed, thereby opening the possibility of counting on experts elected because of their skill, and not because of their representation by a Member State.

ROBERTO MARTINI (Italy), speaking on behalf of the European Union, said that it was essential to have a decision-making process that was fully representative of all the United Nations membership, which was transparent, and which allowed for full consideration of budgetary and programmatic issues.  It was also important to be guided by practice -- how productive was the intergovernmental process, for example, and how useful was Secretariat documentation in its current form?  The Union wanted to respect the principles of democratic decision-making, which the General Assembly embodied, but it was also necessary to ensure that there was a system that worked for all.

For that reason, he believed that the time had come for a frank appraisal of how all the existing structures served the needs of Member States.  The United Nations must be open to ways to improve the mechanisms, so as to ensure that lessons were being learned and that the Organization was not simply entrenching role-playing and historically derived differences between various regions or interests represented in the General Assembly.  The Union was ready to consider ways to strengthen the role of the CPC to ensure that it delivered advice to the Assembly on evaluation and monitoring, two functions which played an increasingly important role in the Assembly’s work.

Concerning the medium-term plans and the budget outline, the Union agreed on the need for a systematic planning document to guide the Secretariat’s implementation of the membership’s agreed mandates.  Nevertheless, more could be made of the current format and usage.  Furthermore, its relevance was also in question awkwardly, not least because the current four-year time horizon of the medium-term plan awkwardly straddled two biennium periods.

MURARI RAJ SHARMA (Nepal) said that, although some improvements had already been made, further changes in the planning and budgeting process were needed.  He appreciated the proposals before the Committee and supported the position of the Group of 77 and China.  A medium-term plan should not be a mere shopping list of actions.  Instead, it should address policy issues vital for fulfilling the mandates of the Organization.  It should spell out targets and allocate resources in the medium term that would help the United Nations fulfil its long-term goals.  The proposals before the Committee merited careful consideration, in that respect.

The decisions of the Assembly should be taken upon careful consideration of consequences, he continued.  A good medium-term plan should be able to strike a balance between the need to respond to the situation and to the challenges beyond the urgency of the moment.  Such a plan should intersperse the annual budgeting targets and long-term goals of fulfilling the objectives of the Millennium Declaration and the Charter.  In the same manner, it was important to put in perspective the proposal for a single stage intergovernmental review.  Nepal supported neither micro-management of the budgeting process nor the Member States abdicating from legislative control over the process.  It was necessary to review the function of the CPC in that context.

The current cost of some $20 million involved in the budgetary process was rather large, he said.  It was necessary to minimize the cost of budgeting and improve its effectiveness.  It was also necessary to justify all spending.  It would be good if more could be achieved with less money.  However, less cost must not mean lower quality of work.  It was important to increase efficiency and effectiveness.  Member States should be in the driver’s seat in determining what the Organization must do and how it must do it.

VLADIMIR A. IOSIFOV (Russian Federation) welcomed the proposals of the Secretary-General aimed at improving and simplifying the budgetary process.  The Secretariat had already taken an important step in improving the budget’s format, he said.  Any change or reform should not lead to a reduction in the effectiveness of oversight by Member States, however, and his delegation advocated a delicate attitude towards any change in the mechanism of the United Nations budget.

Before the Fifth Committee today were the reports of the ACABQ and the Joint Inspection Unit (JIU) on the matter, he said.  Among others, those reports recommended the strengthening of the role of the CPC and an increase in the effectiveness of the oversight bodies.  There was a growing intellectual synergy between the Secretariat and the JIU, he said.  He felt it was important for all interested parties to work together in the reform process and the focus must be placed on those areas where the attainment of success was a realistic goal.

WANG XINXIA (China) said that the comprehensive reform plan of the United Nations, which had been presented by the Secretary-General, had received the attention of Member States.  Change in the planning and budgeting process was an important part of the overall reform.  A new approach to management and greater accountability were needed, and the introduction of results-based budgeting would allow expected accomplishments and achievements to be taken into account.

In addressing the question of United Nations programme planning, it was first of all necessary to identify the problems in the existing system, she continued.  She supported streamlining and better alignment of activities with the priorities and expected outputs to optimize resource utilization.  At the same time, the decision-making power of the intergovernmental bodies must not be compromised.  To avoid duplication and enhance efficiency, various bodies should focus on the issues within their respective fields of expertise.

She went on to say that her delegation was in favour of setting up mock-ups as suggested by the ACABQ.  Reform of the budgetary system would have bearing on the functioning of the Organization, and all Member States had a stake in the continued refining of the system.  She looked forward to a full and constructive exchange of views on the issue.

The Assistant Secretary-General for Programme Planning, Budget and Accounts and United Nations Controller, JEAN-PIERRE HALBWACHS, making his concluding remarks, said that he would provide a flow chart on the process and any other materials needed by delegations to clarify the budget planning process.

NORMA GOICOCHEA ESTONEZ (Cuba) said that her country attached great importance to the reform of budgetary procedures.  Regarding the JIU report, she said that in light of the nature of the Unit, the report should have examined the Secretary-General’s proposals on improving the budgetary process in greater detail.  Furthermore, the gaps in the current budgetary planning system had not been addressed in the report.

Her delegation supported the medium-term plan as the main guideline for policy in the organization, she continued.  In that regard, she asked for more information on how the gaps in the current medium-term plan would be filled, with a view to including the new mandates that would be adopted over the next biennium.

As the Committee turned to the United Nations Common System, AGOSTINO PAGANINI, Chairperson of the Global Staff Association of the United Nations Children's Fund (UNICEF), read a statement on behalf of the Coordinating Committee for International Staff Unions and Associations of the United Nations (CCISUA).  He said that the report of the Independent Panel on the safety and security of United Nations personnel in Baghdad had highlighted the abhorrent state of the security management system.  Accountability should not be applied only to staff at the lower end of the hierarchy.  If some integrity was to remain in the United Nations system, accountability had to be applied throughout the hierarchy, from top to bottom.  Reducing costs must never be an issue when it came to the security of staff.  Savings costs at the cost of human life was unacceptable.

Although the new Master Standard for Job Classification was now ready for introduction as at 1 January 2004, the Coordinating Committee expressed concerns regarding the deletion of such elements as years of experience, language skills and academic background.  From a staff perspective, the move from quantitative to qualitative factors did not make staff any worse off.  However, consideration should be given to the different recruitment practices throughout the common system.  Qualitative and less accurate descriptors in vacancy announcements would create particularly great risks for staff in organizations where posts were advertised externally.  The deletion of such criteria as university degrees and languages required would make it easier to recruit less qualified external candidates over better qualified internal ones.

The CCISUA strongly believed that a successful broadbanding pilot programme required a credible performance appraisal system.  Experience showed that neither managers nor staff were happy with the current performance appraisal system.  Staff believed that they were patronized and that their talents and competencies lacked due recognition.  The Coordinating Committee was totally opposed to pay for performance, as envisaged.  Staff had no confidence that the performance appraisal system would distinguish high performers.  On the broad issue of management, the Coordinating Committee had been approached by managers who complained that the Office of Human Resources Management spoke on its own behalf; there was a lack of consultation between human resources and managers who had their own views; and those views were not expressed in forums.

The Coordinating Committee supported three basic types of contracts in the United Nations system:  career contracts; fixed-term; and temporary contracts.  Career contracts must be clearly identified and their terminology standardized across the system to reduce confusion.  It was highly important that the Organization maintain a career contract because the phasing out of permanent contracts was contradictory to the ongoing process of national competitive examinations.  Extending staff on a short-term basis over long periods of time created a culture of favouritism.  Permanent contracts were the best way of ensuring the independence of the Secretariat, as well as ensuring greater competitiveness for the common system.

The Coordinating Committee agreed that there was a need to provide a well-designed framework for mobility, he said.  However, what was envisaged had a great deal of unfairness, as not all functions could be subjected to mobility.  Linking promotion to mobility would have a negative impact on all organizations, as staff who were eager to get promoted would move around, if possible every two years, thus, disrupting the work of a unit or division, and managers would be training new staff in the knowledge that training would have to start again two years later.  There must also be balanced mobility between the organizations, as there currently appeared to be more mobility from specialized agencies towards the United Nations, than vice versa.  The Coordinating Committee was also interested in the mobility of General Service staff and would like to see proposals on the matter.

The Coordinating Committee supported the increase in the level of hazard pay granted to locally recruited staff, he continued.  To make a difference between staff -– international and local -– and not recognize the risks for local staff when working for the United Nations was unacceptable.  The CCISUA also supported the views expressed by the Federation of International Civil Servants Association (FICSA) on the issue of granting hazard pay to area staff of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).

The necessary action must be taken to restore salaries in the Professional and higher categories to the appropriate level, he said.  The General Assembly’s decision to grant no salary increase to the lower Professional grades in 2003 had been a great disappointment to staff.  Staff believed that granting a salary increase to the higher-level Professional grades was not justified, in light of the constant examples of a leadership crisis in the organization.

Regarding methodologies for surveys of best prevailing conditions of employment at Headquarters and non-Headquarters duty stations, the Coordinating Committee urged the Fifth Committee to ensure that the methodology for the next survey round was flexible enough to appropriately accommodate the peculiarities of labour markets and work environment.  Some issues within the methodology for the headquarters duty station should have received greater attention, such as a fairer application of the Flemming principle in determining remuneration and conditions of employment, and the quantification of hidden benefits provided by comparators in both the private and the public sectors.

Introduction of Documents

LIONELITO BERRIDGE, Officer-in Charge for the Policy Coordination Unit, Office of Programme Planning and Budget Division, introduced the report of the Secretary-General on the administrative and budget implications of the ICSC decision on the increase of hazard pay for locally recruited staff (document A/58/378).

Other Matters

AHMED FARID (Saudi Arabia) pointed out a discrepancy in the data regarding his country’s total gross national income and per capita income, which had been submitted by the Secretariat during the Committee’s informal consultations, and the data used by the members of the Committee on Contributions.  He requested a prompt and written clarification on the matter, to be presented during informal consultations this afternoon.

* *** *