Fifty-eighth General Assembly                              

Fifth Committee                                            

40^th Meeting (AM)

fifth committee considers possible ‘unprecedented growth’

in peacekeeping budget, as it opens resumed session

Controller Says Requirements

For Peacekeeping Could Exceed $4 Billion for 2004-2005

At some $2.649 billion, the estimated cost of financing 11 active peacekeeping missions in 2004/2005 would represent a decrease against the appropriations for the current fiscal year, the Fifth Committee (Administrative and Budgetary) was told, as it opened its second resumed session today.  However, the Organization had to be prepared for an unprecedented growth of its peacekeeping budget due to newly mandated deployments for Haiti and the projected expansion of operations in Côte d’Ivoire, as well as extension of the East Timor and Sierra Leone missions and possible missions in Burundi and the Sudan. 

The financial year of peacekeeping operations runs from 1 July to 30 June, and their costs are assessed among Member States on the basis of a special peacekeeping scale.  The budget Committee traditionally devotes its late spring session, which is expected to last through 28 May this year, to various aspects of financing of United Nations peacekeeping operations, ranging individual missions’ budgets to procurement and the treatment of contingent-owned equipment.

The budgets of peacekeeping missions are less amenable to forward planning than the Organization’s regular budget, because they are subject to decisions of the Security Council that may be taken at any time during the year, depending on the world situation.  For the same reason, the total cost of United Nations peacekeeping is subject to considerable fluctuation from year to year.

Introducing the proposed peacekeeping budget for 2004/2005, the United Nations Controller, Jean-Pierre Halbwachs, confirmed the unpredictable nature of peacekeeping, which would test the Organization’s rapid deployment capacity this year.  While there was no firm figure for new and possible missions, the total requirements could exceed $4 billion with the start-up of new missions and inclusion of revised estimates for the United Nations Mission in Sierra Leone (UNAMSIL) and the United Nations Mission in Ethiopia and Eritrea (UNMEE) –- the highest level in 10 years.

Resources would be needed to fund the new and prospective missions, while supporting the existing ones, he said.  For that reason, it was necessary to review existing tasks, suspend low-priority activities and realign personnel resources.  It would also be necessary, at least temporarily, to augment the existing staffing of the Department of Peacekeeping Operations.  In that connection, it would be his intention to meet additional requirements not through asking for additional resources, but by utilizing, whenever possible, vacancies from existing missions.  If there were long-term requirements, they would be presented in the new Support Account budget.

The Chairman of the Advisory Committee for Administrative and Budgetary Questions (ACABQ), Vladimir Kuznetsov, stressed the need “to start planning now to develop the Organization’s capacity to respond quickly and efficiently to a possible dramatic upsurge in peacekeeping activities”.  While noting some positive developments regarding strategic deployment stocks (SDS), which had been introduced two years ago to facilitate the Organization’s ability to deploy a mission within 30 to 90 days from the adoption of its mandate, he said that, of course, the SDS would not meet the requirements of all potential missions.  The situation the Organization was facing was very unusual, and efficient management of the stocks would be essential.

Also presented to the Committee this morning was the audit opinion on peacekeeping financing and the recommendations of the Board of Auditors, which were introduced by Pramesh Bhana, Chairman of the Audit Operations Committee and Director of External Audit of South Africa.  The Director of the Office of the Under-Secretary-General for Management, Jessie Mabutas, introduced the report on the implementation of the Board’s recommendations.

Dileep Nair, Under-Secretary-General for Internal Oversight Services, introduced the report of the Office of the Internal Oversight Services (OIOS) on the investigation into the fraudulent diversion of $4.3 million by a senior staff member of the Reconstruction Pillar of the United Nations Interim Administration Mission in Kosovo (UNMIK).  While the successful investigation had resulted in a speedy conviction of the perpetrator and recovery of the misappropriated funds, he noted that had “even the most basic of background checks” been performed on the staff member in question, the matter might have never arisen.

Statements on the peacekeeping budget were made by representatives of Canada (also on behalf of Australia and New Zealand), Norway and Ireland (on behalf of the European Union and associated States).

During the organizational part of the meeting, the Committee also adopted its programme of work for the session, on the understanding that necessary changes would be made in the course of the month, as needed.  Representatives of Qatar (on behalf of the “Group of 77” developing countries and China) and Ireland (on behalf of the European Union) participated in the discussion of the programme of work.

The Committee will continue its work at 10 a.m. tomorrow, 4 May.

Background

During its second resumed session, which is opening today and is expected to last through 28 May, the Fifth Committee (Administrative and Budgetary) will focus mostly on various aspects of the financing of United Nations peacekeeping, ranging from the funding of individual missions to procurement and the treatment of contingent-owned equipment.

The financial year of peacekeeping operations runs from 1 July to 30 June, and their costs are assessed among Member States on the basis of a special peacekeeping scale.  Unlike the regular budget, the budgets of peacekeeping missions are less amenable to forward planning, because they are subject to decisions of the Security Council that may be taken at any time during the year, depending on the world situation.  For the same reason, the total cost of United Nations peacekeeping is subject to considerable fluctuation from year to year.

The budgeting needs and performance of peacekeeping operations are being presented to the Committee both in individual reports for each mission and in several overview documents containing information on the situation on the whole.  The documents to be considered during the session also include audited financial statements for the preceding financial year and reports containing recommendations of the Board of Auditors and the Advisory Committee on Administrative and Budgetary Questions (ACABQ).[1]

The proposal for the period starting 1 July 2004 amounts to some $2.7 billion, compared with an approved level of $2.8 billion for the current (2003/2004) period.  This represents a decrease of 5 per cent, primarily due to the downsizing of several missions.  Of the proposed total budget, an amount of some $2.5 billion relates to peacekeeping missions, $28.8 million to the Logistics Base in Brindisi, Italy, and $122.1 million to the peacekeeping support account.

The overall level of United Nations peacekeeping was relatively stable during the current financial period.  While there was an expansion of operations in the African region, primarily in the Democratic Republic of the Congo, a number of peacekeeping missions, including the United Nations Mission in Sierra Leone (UNAMSIL), United Nations Interim Administration Mission in Kosovo (UNMIK) and the United Nations Mission of Support in East Timor (UNMISET), were scaled down, and the United Nations Mission in Bosnia and Herzegovina (UNMIBH) was closed down.

Meanwhile, there is currently “a distinct possibility” that a number of new missions would be established during the 2004/2005 period, including those in Burundi, the Sudan and Haiti, and that the mission in Côte d’Ivoire would be expanded.  Also, UNMISET may be extended for further 12 months beyond 20 May 2004.

As for the period 1 July 2002 to 30 June 2003, expenditures amounted to some $2.4 billion against approved budgets of about $2.6 billion, including some $2.3 billion for peacekeeping missions, $14.4 million for the United Nations Logistics Base at Brindisi, and $97.1 million for the peacekeeping support account.

A 23-per cent decline in outstanding assessments (from $662.2 million to $508.3 million) enabled earlier settlement of debts in the active missions to troop-contributing countries.  On the other hand, closed missions had reduced cash, as pursuant to Assembly decisions, funds were used for strategic deployment stocks (SDS), and $84.4 million was returned to Member States.

An overview of financial and administrative aspects of peacekeeping is contained in the Secretary-General’s consolidated report (document A/58/705), which has been prepared for the second time this year.

Proposed requirements for the period 2004-4005 can be summarized in the following table (in thousands of US dollars):

Peacekeeping component	Expenditure (2002/03)	Apportionment (2003/04)	Proposed budget (2004/05)a		Variance
				Amount		Percentage
MINURSO	38 409.0	41 529.5	41 990.0	460.5		1.1
MONUC	479 952.0	641 038.3	718 305.6	77 267.3		12.1
UNAMSIL	603 085.5	520 053.6	199 799.8	(320 253.8)		(61.6)
UNDOF	38 975.7	40 009.2	40 902.1	892.9		2.2
UNFICYP	43 644.1	43 798.8	47 448.7	3 649.9		8.3
UNIFIL	107 596.9	90 000.0	94 741.2	4 741.2		5.3
UNMEE	209 619.1	188 400.0	201 460.8	13 060.8		6.9
UNMIK	329 967.8	315 518.2	272 210.8	(43 307.4)		(13.7)
UNMILb	—	564 494.3	872 609.5	308 115.2		54.6
UNMISET	287 941.1	208 827.5	9 385.6	(199 441.9)		(95.5)
UNOMIG	28 821.7	30 709.0	32 351.0	1 642.0		5.3
Subtotal, missions	2 168 012.9	2 684 378.4	2 531 205.1	(153 173.3)		(5.7)
UNLB	14 447.5	22 208.1	28 797.3	6 589.2		29.7
Support account	97 145.4	112 075.8	122 068.6	9 992.8		8.9
Total	2 279 605.8	2 818 662.3	2 682 071.0	(136 591.3)		(4.8)

^aExclusive of budgeted voluntary contributions in kind.

^bFor the 2004/05 period, data relate to projected requirements pending the finalization of the budget.

In 2004/2005, reductions in resource requirements are envisioned for UNAMSIL, UNMIK and UNMISET in connection with progressive downsizing of those missions, as well as projected liquidation of UNAMSIL by March 2005 and UNMISET by December 2004.  All other peacekeeping missions reflect an increase in resource requirements, particularly UNMIL, for which estimates are currently projected, pending the finalization of its detailed budget for 2004-2005, by March 2005.

For UNMIL, the estimates for 2004-2005 will reflect full deployment of military and police personnel and related civilian support, as well as completion of procurement of equipment deferred since the Mission’s establishment.  Additional resources for THE United Nations Organization Mission in the Democratic Republic of the Congo (MONUC) are based on full deployment of the Mission.

Strategic deployment stocks (SDS) (also in documents A/58/707, and A/58/759/Add.9), which were introduced two years ago to facilitate the Organization’s rapid deployment capacity, so far have been used to improve operational readiness of several missions, including those in Liberia and Côte d’Ivoire.  At the same time, expenditures of only $88.9 million were incurred by the end of 2003 out of a total approved level of $141.5 million.  As full capability to support rapid deployment of a complex mission was not achieved by the initial deadline of 1 July 2003, the time was extended to 30 June 2004.

In connection with the creation of the SDS, the role of the United Nations Logistics Base in Brindisi (UNLB), which has been operating since the end of 1994 under a rent-free arrangement with Italy (also addressed in documents A/58/702, A/58/708 and A/58/759/Add.9), was to be expanded.  It was envisioned that the Base would take on new responsibilities as an operational arm of the new mechanism and serve as a training and conference centre, as well as a support base for air operations.  The $28.8-million budget of the Base proposed for 2004/2005 provides for 37 international and 114 national staff.

To develop its rapid deployment capacity, the Department of Peacekeeping Operations (DPKO) has initiated a roster, which should contribute to creation of teams of experienced staff during the start-up phase of a mission.  Other efforts in this regard included an exercise at the UNLB in January 2003 to further refine the integrated mission planning process; development of standard operating procedures; and planned creation of regional logistical hubs in support of peacekeeping activities.

Also intended to facilitate rapid deployment of missions was the Peacekeeping Reserve Fund (also in documents A/58/724 and A/58/732), which was established by the Assembly in 1992 as a cash-flow mechanism.  While its initial level had been set at $150 million, last June, it was just over $194 million.  Of that amount, $33.250 million was subsequently transferred to the support account for peacekeeping operations, leaving an amount of $161.047 million.

By the end of February 2004, the Fund’s balance was almost $163 million, and the amount of available cash was $73.957 million.  That takes into account  $12.820 million in loans to the United Nations Mission in the Central African Republic (MINURCA) that are still outstanding and $76.2 million in loans to the Liberia mission for its start-up requirements.  The loan to UNMIL will be repaid when the assessed contributions are received.  Currently, the Reserve Fund is expected to be used for immediate start-up requirements of the United Nations Operation in Côte d’Ivoire (UNOCI), which was established by the Council on 27 February 2004.

According to the documents, it is vital that the Reserve Fund be maintained at its current authorized level, as its maximum liquidity will be critical for start-up requirements of new operations until their detailed budgets can be submitted for approval by the Assembly at the main part of its fifty-ninth session.

The proposed budget of the Support Account (also addressed in documents A/58/703 and Add.1, A/58/715 and A/58/760), which was established in the last decade to allow the Secretariat to plan and deploy peacekeeping operations in a coordinated manner, amounts to $122.1 million and provides for 762 posts.  The increase of some $10 million (8.9 per cent) over resources approved for the 2003-2004 period is due mainly to a change in standard salary costs ($9 million) and the requirement for 19 new posts ($1.2 million), offset by a reduction of $0.2 million in non-post resources. 

In 2004/2005, the Account is expected to play in role in further development of the Organization’s Standby Arrangements System (UNSAS), provision of DPKO-recognized training by MemberStates and quarterly payments to troop-contributing countries.  It is also supposed to be able to provide for deployment of a fully functional mission of up to 5,000 persons within 90 days of a Security Council mandate.

Total expenditures for the support account for the 12-month period ended 30 June 2003 amounted to $97.1 million, compared to $84.3 million in the previous period.  The increase was mainly due to the full impact of additional posts authorized following the comprehensive review and capacity study requested by the Special Committee on Peacekeeping Operations.

According to the consolidated report, a total of 10,652 posts are proposed for international and national staff in peacekeeping missions for 2004-2005, compared with 12,043 approved for 2003-2004, exclusive of the UNLB and the Support Account.  The net decrease of 1,391 posts is attributable primarily to the downsizing of UNAMSIL, UNMIK and UNMISET.  With the inclusion of a total of 913 posts proposed for the UNLB and the Support Account, the total for all peacekeeping components comes to 11,565 posts, compared with 12,922 posts for 2003-2004.

The document also outlines further improvements in the results-based budgetary frameworks, including greater involvement of senior mission officials in budget planning for 2004-2005, and addresses cross-cutting operational issues involving such areas as air operations, inventory management, mission procurement, management of contingent-owned equipment, banking arrangements and information technology.

Training resources for peacekeeping operations are being projected at a higher percentage than the 1.5 per cent of staff costs in the regular budget, taking into account a higher turnover of staff and the requirement for very specialized annual training.  Total resources proposed for the training of civilian staff for 2004-2005 amount to some $5.8 million -- a decrease of $3.1 million compared with $8.9 million approved for 2003-2004.

In connection with information and communication technology, the report emphasizes standardization of information systems and platforms.  Following a 2002 analysis of existing databases a project of database consolidation has been undertaken to ensure compatibility and optimal effectiveness.  By its targeted completion date of June 2004, the number of active databases will be reduced to 175.

Among improvements during the period ended 30 June 2003, the report mentions the fact that the average interval for the completion of memoranda of understanding with troop-contributing countries (from the start of negotiations to the time of signature) was reduced from 198 days in 1999 to 102 days in 2002.  For the period ending 30 June 2003, the number of memoranda under negotiation totalled 60, of which 27 are currently pending signature.

Commenting on the peacekeeping budget, the Advisory Committee (document A/58/759) notes visible improvements in its presentation.  Proposals for 2004/2004 contain more measurable indicators of achievement, more outputs are measurable, and attempts have been made to link resources to outputs and indicators of achievement and to attribute human resources to individual components.  Further improvements are needed, however.

In connection with the civilian component of the missions’ budgets, the Advisory Committee addresses proposed conversions of staff from the 300 (short-term appointments) to 100 series (all staff, except for short-term and project personnel), after four years of service, to attract the most highly qualified candidates.  Such a conversion would involve about 1,600 Professional and 5,000 national staff.  Yet, there has been no reliable analysis of the financial impact of such a measure, and the Advisory Committee points out that it was never intended to create long-term career opportunities for staff recruited under the 300 series.

To date, over $10 million has been included in the budgets of three missions (UNMIK, UNAMSIL and UNMEE) for the conversion of international staff.  However, the ACABQ has serious doubts about the accuracy of those figures.  Recommending referring the matter to the Assembly, it suggests that pending its consideration of the matter, conversions might be deferred and the four-year ceiling of contracts under the 300 series suspended.

The report also contains comments on the proposals for the conversion of contracts of individual contractors on special service agreements without benefits (SSA) in the areas of engineering, communications, general service, transport, finance and personnel, into fixed-term appointments, based on their continued nature.  The Advisory Committee points out that in a number of instances, such services could be outsourced, instead.  There should be recognition of the difference between manual-type labour and the provision of specialized or professional services, as well as the fact that SSA were designed for the latter.

In addition, the long-standing problem of staffing at lower-than-approved grades, which, in some cases, has persisted for eight to 10 years, is addressed in the report, according to which such inconsistencies should be remedied through grade reviews and reclassification.  Savings could also be achieved through extending the time between rotations of contingents, which are currently budgeted for every six months.

Turning to operational expenditures, the Advisory Committee devotes much attention to such items as travel, training, assets management and air operations, which represent the most expensive item of operational costs (12.8 per cent of the total).  Acknowledging the progress made by the DPKO in the management of air operations and efforts to reconfigure air assets in the light of changing operational needs, the Advisory Committee endorses the Board of Auditors’ recommendation related to the need to make air operations budgets more reflective of actual conditions on the ground.

As for training, the Advisory Committee notes that estimates are not clearly stated since the costs of training-related travel and supplies are subsumed under various miscellaneous budget lines.  In this regard, the report reiterates that all resources requested for training should be clearly and comprehensively shown.  It is also necessary to evaluate the effectiveness of training to ensure that it meets individual and organizational goals.  Also required is monitoring of the reassignment of trained personnel to avoid additional training.

Expressing concern over persistent over-expenditures for travel, the Advisory Committee further notes that while the estimates for official travel in 2004/2005 in a number of missions have been reduced, presentation of these requests continues to lack precision and clarity. 

The Committee also had before it a Board of Auditors’ report presenting financial statements of all peacekeeping operations for 2002/2003 examined by the Board (document A/58/5/Vol.II).  Also included in the document is the audit opinion of the Board of Auditors, as well as the management audit of air operations, contingent-owned equipment, inventory management, procurement practices and training, and the Board’s comments on the status of implementation of its previous recommendations.

Among its main findings, the Board lists the fact that an amount of $593.7 million in assessed contributions had been outstanding for over one year as at 30 June 2003.  Furthermore, there was a shortfall of cash of approximately $92.9 million to settle the outstanding liabilities of closed missions.

The Board has also reviewed the implementation of a new policy of the administration on allotments to peacekeeping operations, which give the Chief Administrative Officer of a mission flexibility to redeploy funds among various groups of expenditure to better prioritize available resources.  During the financial year, a new monitoring tool was launched in that respect.  However, as no management reports were available, the Board expresses concern that redeployment of funds was not continuously monitored and recorded.

Further, according to the report, the process of property write-offs continued to be protracted. Property awaiting write-off and disposal at 30 June 2003 amounted to $43.1 million.  Also, due to excessive budgeting, in several missions, an amount of $59.1 million (22 per cent) of the $270.2 million appropriated for air operations remained unspent, with actual flight hours (45,501) not reaching the budgeted figure of 89,684 hours.  Performance evaluation reports for air vendors were not submitted on a regular basis, and some missions did not complete performance reports before contracts were extended.

The Board’s main recommendations include review of asset management replacement policies and factors causing delays in the write-off and disposal process.  Other recommendations address factors hampering the acquisition and replenishment of the strategic deployment stocks; establishment of written agreements for shipments from strategic deployment stocks; and approval of a method for consistently applying strategic deployment stocks replenishment.

It is also necessary to better formulate the budget to make it more reflective of actual air operations; assess the cost-effectiveness of utilizing an executive jet; identify and evaluate the reasons for excessive procurement lead times; compile performance reports before extending or renewing contracts; ensure that staff occupying posts are on the level required; adequately train staff; and evaluate the impact of training actions.

Also before the Committee was a Secretary-General’s report on the implementation of the Board’s recommendations (document A/58/737), which focuses mainly on those recommendations that require further comments from the Administration, particularly on issues related to the replenishment of strategic deployment stocks, presentation of financial statements, allotment procedures and human resources management.

In particular, in response to a recommendation on the repayment of debt to Member States, the document states that under the current legislative framework, the Administration cannot pay long-outstanding amounts due in individual missions until corresponding unpaid assessments are settled.  Should the assessments remain unpaid, the Administration’s ability to repay long-outstanding amounts will depend upon possible decision by the Assembly on the proposal to consolidate peacekeeping accounts.

Regarding SDS, the Secretary-General states that as at December 2003, a total amount of $13.58 million was outstanding, of which $13.57 million was owed by the United States.  By the terms of resolution 56/292, an amount well in excess of the amount outstanding for strategic deployment stocks is being held in suspense accounts for the United Nations Protection Force (UNPF) and UNMIBH, pending settlement of the balance by the United States.

In connection with the Board’s work, the ACABQ, in its report (A/58/759), welcomes its increased emphasis on management audit, which helps to determine whether the resources of the audited administrations are being used effectively.  In the future, the Board may wish to continue emphasizing such audits, particularly in regard to cross-cutting issues. 

Noting increasing compliance with the Board’s recommendations, the Advisory Committee nevertheless recommends continued monitoring of the implementation.  The report also welcomes the Board’s collaboration with other oversight bodies in the planning of audit activities.  The Advisory Committee trusts that such coordination and collaboration would continue to ensure optimal use of audit resources, thus ensuring better complementarity of effort and wider coverage of audit areas.

Organizational Work

At the outset of the meeting, the Committee addressed the organization of work for the second resumed session as set out in document A/C.5/58/L.67/Rev.1.

The representative of Qatar, speaking on behalf of the “Group of 77” developing countries and China, expressed concern about the late issuance of documentation for the second resumed session, which might negatively impact on the ability of Member States to participate actively in the discussions and negotiations.  The Group also observed that the proposed programme of work could be amended to reflect a more balanced allocation of time for addressing peacekeeping budgets.

The representative of Ireland, speaking on behalf of the European Union and associated States, expressed disappointment that a number of reports on cross-cutting themes in peacekeeping, including on recruitment, training and information technology, would not be available for consideration.

The Committee then approved without a vote the programme of work on the understanding that adjustments would be made in the course of the session.

Introduction of Reports

PRAMESH BHANA, Chairman of the Audit Operations Committee and Director of External Audit of South Africa, introduced the Board of Auditors’ report (document A/58/5/Vol.II).  He said that the Board had continued to pay special attention to the issues of particular interest to the General Assembly and the Fifth Committee.  It had covered, among other things, the management audit of air operations, contingent-owned equipment, inventory management, procurement, training and air operations.  The document reflected a change in the format of the Board’s reporting to the Assembly.

In general, it would be fair to conclude that the Administration had continued to make progress in the implementation of the Board’s recommendations, he said.  The Board had issued an unmodified opinion on the peacekeeping operations’ financial statements.  Total income of some $2.7 billion had exceeded the expenditure of some $2.5 billion.  However, significant assessments had been overdue for more than a year.

Expenditures of only $88.9 million had been incurred at year-end in respect of SDS out of a total approved level of $141.5 million, he continued, thereby not achieving a full capability to support rapid deployment of a complex mission by the initial deadline of 1 July 2003.  As a result, the deadline was extended to  30 June 2004.  Among other findings of the Board, he mentioned the fact that strategic deployment stocks had been transferred to non-peacekeeping operations.  However, there were no written agreements for strategic deployment stocks transferred to non-peacekeeping missions and agencies to enable the Administration to formally hold these entities liable for the repayment of agreed costs at agreed times.

The Director of the Office of the Under-Secretary-General for Management, JESSIE MABUTAS, introduced the report on the implementation of the Board’s recommendations (document A/58/737), saying that the task of the Secretary-General in providing the Committee with adequate and relevant updated information had been facilitated by the clarity of the Board’s recommendations and systematic monitoring of their implementation.  The Secretary-General continued to make every effort to ensure timely and comprehensive implementation of those recommendations as they continued to help improve the overall efficiency of peacekeeping operations.  In that regard, the Administration had been engaged in improving the monitoring of the use of resources throughout the financial period to ensure optimum budget implementation.

She said that there had been significant inter-departmental efforts to address the issues of continued monitoring of redeployment of resources, procurement planning and management, and new ethical guidelines had been drafted in the area of procurement.  Among other measures, she mentioned re-examination of the methods employed for replenishing SDS and ensuring compliance with enhanced guidelines on assets disposal and write-off.  The responsibility for ensuring the timely implementation of the Board’s recommendations was largely the responsibility of the Under-Secretary-General of the Department of Peacekeeping Operations.  For that reason, representatives from that Department would be present during the course of the Committee’s deliberations to provide any further clarifications that might be needed. 

Comments of the ACABQon the matter were introduced by the Chairman of that body, VLADIMIR KUZNETSOV.  Noting the good quality and improved presentation of the Board’s report, he said, in particular, that during its examination of the budgets of individual missions, the Advisory Committee had benefited greatly from the findings and recommendations of the Board.  The ACABQ had continued to focus on the issues examined by the Board relating to budget preparation, as well as monitoring and control of budget implementation.  Attention had also been given to the adequacy of explanations on budget performance changes, proposed budget estimates, training and air operations.

The United Nations Controller, JEAN-PIERRE HALBWACHS, then introduced the Secretary-General’s reports on the administrative and budgetary aspects of peacekeeping operations.  He said that the agenda of this year’s annual review of peacekeeping-related issues was “pretty heavy”:  the Committee had before it about 50 documents covering various peacekeeping requirements and the performance of individual missions, the Logistics Base, the Reserve Fund, the Support Account, strategic deployment stocks and other matters.  The resource requirements of several new missions, including those in Côte d’Ivoire and Haiti, would be presented at a later date.

According to the summary of resource performance for peacekeeping operations contained in the overview report, the total appropriations for 2002/2003 had amounted to some $2.6 billion against the expenditures of some $2.39 billion, he said.  The overall budget implementation rate of 92 per cent was the same as for the prior financial period.  While there had been an expansion of operations in the African region, primarily in the Democratic Republic of the Congo, a number of peacekeeping missions, including UNAMSIL, UNMIK and UNMISET, had been scaled down, and UNMIBH had been closed.  New missions had been established in Liberia and Côte d’Ivoire.  More measurable results-based budgeting elements had been included in the new budget presentation. 

He then addressed the foreseen expansion of peacekeeping.  While the proposal for the existing missions for 2004/2005 had been estimated at some $2.649 billion, the Secretariat was now in the process of completing the budget for Côte d’Ivoire.  It was also expected that operations would be extended in East Timor, and a revised budget for UNAMSIL would be presented at a later date.  Requirements for Haiti needed to be determined following the establishment of the Mission by the Security Council last Friday.  Based on possible decisions by the Council, prospective operations in Burundi and the Sudan were also likely to have an effect on the total peacekeeping budget for 2004/2005.

While there was no firm figure for new and possible missions, he said that based on his best professional judgement, it was possible to say that with the start-up of new missions and the inclusion of revised estimates for UNAMSIL and UNMEE, the peacekeeping budget would go over $4 billion -– the highest level in  10 years.  Confirming the unpredictable nature of peacekeeping, he said that would test the Organization’s rapid deployment capacity.

In view of an anticipated 60 per cent increase in the number of military personnel by the time all envisioned missions were fully deployed, as well as the growth in civilian staff, resources would be needed to fund the new and prospective missions, while supporting the existing ones.  For that reason, it was necessary to review existing tasks and suspend the low-priority activities, he said.  It would also be necessary, at least temporarily, to augment the existing staffing of the DPKO.  In that connection, it would be his intention to meet additional requirements, not through asking for additional resources, but by utilizing possible vacancies from existing missions.  If there were long-term requirements, they would be presented in the new support account budget.

Regarding the proposed conversion of staff from 300 to 100 series, he said that the issue would be further addressed within the framework of consideration of human resources policies next fall.  Guidance would be required from the Assembly, however, on whether to suspend the conversion of staff for now.  The cost of the conversion would also be reviewed.

Introducing the ACABQ’s general report (document A/58/759), Mr. KUZNETSOV commended refinements in the presentation of the peacekeeping budget this year, adding that further improvements should include identification of precise time frames for implementation.  Most important, there was an absolute necessity to create financial systems with links to a comprehensive programme information system, which would allow budget-makers to directly attribute requests for resources to outputs and accomplishments.  Otherwise, performance measurement and reporting would remain at a primitive level, and the goal of results-based budgeting would be unrealized.

The implementation rate of most of the budgets for 2002/03 had further improved, he continued.  To some extent, that reflected more realistic budgeting techniques.  As a result, in a number of missions, the Committee’s observations and recommendations this year were aimed at improved management and efficient utilization of resources, rather than significant reduction in the overall level of resources.  Strict monitoring of budget implementation should further the trend towards improved budget performance, while allowing the necessary flexibility to meet unforeseen developments.

Regarding prospects for the future, he said that in the coming months, the United Nations would face a number of new or expanding peacekeeping operations, including those in Côte d’Ivoire, Burundi, Haiti and the Sudan.  All of them were complex missions involving substantial military and civilian components.  In considering potential requirements in that regard, the Advisory Committee had kept in mind the need to ensure rapid deployment capability in deploying the missions.

While noting some positive developments with regard to SDS, including the establishment of a Steering Group on strategic deployment stocks, he said that, of course, the stocks would not be in a position to meet the requirements of all potential new missions.  The situation the Organization was facing was very unusual, but efficient and effective management of those stocks would be essential to provide maximum assistance in that regard. 

It was important to start planning now to develop the Organization’s capacity to respond quickly and efficiently to a possible dramatic upsurge in peacekeeping activities, he stressed.  The Assembly might wish to give further policy guidance, particularly as far as arrangements for rapid deployment and enhancement of procurement and logistic facilities were concerned.

Regarding specific missions, the ACABQ’s recommendations regarding UNAMSIL had been affected by the recent Security Council decision to adjust the timetable for the Mission’s drawdown during 2004.  The estimates were also affected by the Advisory Committee’s position on the conversion of staff from the 300 to the 100 series.  The ACABQ had welcomed the Mission’s use as a regional logistic hub.

On MONUC, he said the proposed budget was an example of significant improvement in budget formulation, including presentation of the results-based budgeting framework.  MONUC activities would be significantly affected by the developments in the electoral process.  Noting that MONUC was a complex mission, he reiterated the Committee’s request to undertake a comprehensive review of its organizational structure.

The UNMEE budget was notable for a number of reasons, including the fact that it was one of three missions for which posts had been identified for transfer from the 300 to the 100 series.  The UNMEE was also an example of a mission where a large number of posts were filled at lower than budgeted levels.  As a result of security in the mission area, a plan had been formulated to relocate UNMEE headquarters in Asmara.  The Advisory Committee was recommending approval of an appropriation for that purpose in its report on safety and security.  It had also requested that the issue of relocating the Addis Ababa headquarters back to the Economic Commission for Africa(ECA) compound be analysed.

In conclusion, he recalled that United Nations peacekeeping had first mushroomed in the 1990s.  With the passage of General Assembly resolution 49/233 and subsequent procedures, budgeting had become more realistic and operational procedures more standardized.  While those accomplishments were real, they had not obviated the need for continued vigilance in the management of those operations.  The Advisory Committee intended to vigorously pursue the goal of maximum efficiency and economy in peacekeeping operations.

Statements

ADELLE FERGUSON (Canada), also speaking on behalf of Australia and New Zealand, said significant progress had been made in improving management of the overall peacekeeping programme and the considerable resources provided to it.  However, as the coming year carried with it the possibility that several new operations would be launched, the peacekeeping budget could be more than $4.5 billion.  She urged Member States therefore to pay their assessments in full and on time, and underlined the need for prompt reimbursement of troop contributing countries and the settlement of outstanding claims.  Also, the full amount of outstanding special assessed contributions must be recovered to sufficiently fund the strategic deployment stocks programme.

She welcomed the progress made in the improved use of results based budgeting and urged the Secretariat to continue seeking ways to strengthen that budgeting and reporting structure.  She supported in that regard the recommendations made by the ACABQ and the Board of Auditors.  She also urged the Secretariat to actively pursue opportunities for optimizing the provision and management of support resources and service delivery between UNMIL, UNAMSIL and the new mission in Côte d’Ivoire, and to pursue similar efficiencies where the United Nations operated within the same region.  The safety and security of United Nations personnel in the field was an issue of grave significance.

MARI SKAARE (Norway), welcoming the performance reports on the Support Account, said the advantages and benefits of results-based budgeting were easy to see, but more work could be cone on the baseline itself and on the indicators of achievement.  The challenge of results-based budgeting was to measure real progress in qualifying entities and not necessarily to have as many indicators as possible.  Considerable progress had been made towards the overall conduct and management of increasingly multifunctional operations.

She said that adequate resources at Headquarters were vital to ensure proper planning and implementation of peacekeeping operations.  Increased cooperation with regional organizations was an important means of making the most of limited resources.  She was concerned about the depletion of SDS over the last year, and said replenishment strategies had to be developed.

The need for new measures to strengthen the safety and security of United Nations and associated personnel would have budgetary implications, which should be addressed.  Regarding air operations, he said concern should not only be with the number of flight hours and fuel prices, but also with air safety.  Last year, the Committee had rejected a proposal to establish an advisory position for a trauma expert.  The traumatic experience in Baghdad had been a terrible reminder of the need for such expertise, she said.

Work still needed to be done on a baseline and on indicators for an overall, coherent policy of gender mainstreaming in all peacekeeping activities, she continued.  She expected a full set of indicators of achievement for the whole process from initial stages of planning for an operation to post-conflict reconstruction.  In general, the DPKO needed to increase its planning capacity, also for all civilian dimensions of peacekeeping operations, and cooperate closely with other United Nations departments, funds and programmes in that respect.

Introduction of Further Reports

Mr. HALBWACHS then introduced 21 reports by the Secretary-General on individual missions’ financing, describing the details of proposed changes in the budgets, implementation rates of each active mission and the disposition of assets of closed missions.

DILEEP NAIR, Under-Secretary-General for Internal Oversight Services, then introduced the Office of the Internal Oversight Services (OIOS) report on the investigation into the fraudulent diversion of $4.3 million by a senior staff member of the Reconstruction Pillar of UNMIK (document A/58/592).  The report presented two important issues for the Committee’s consideration:  the value of collaborative investigations conducted by the United Nations’ and other investigative bodies, and the ease with which such crimes could be committed.

The case involved monies owed to the Kosovo Energy Corporation (KEK) for the sale of electricity to the Serbian State-owned energy company (EPS).  The funds had been fraudulently diverted to the private bank account of Jo Hans Dieter Trutschler, a former staff member of the Reconstruction Pillar, who was at the time Chairman of the Supervisory Board of KEK.  In April 2002, the then head of the Reconstruction Pillar had been made aware of the diversion of the funds and had reported the matter immediately to the European Anti-Fraud Office (OLAF) in Brussels.  In May 2002, the OIOS had been appraised.  The collaboration between OLAF and the OIOS had been very successful, as the appropriated funds had been returned, and Mr. Trutschler was now serving a 44-month jail sentence in Germany.

He said the report identified a number of other issues in the case.  For instance, no verification had been carried out of Trutschler’s curriculum vitae.  Mr. Trutschler had provided $200,000 to another UNMIK staff member as an investment in the singing career of that staff member’s daughter.  There had been a general lack of supervision of Mr. Trutschler.  He had also made other fraudulent travel claims during his employment with UNMIK.  The matter of the $200,000 was still under active investigation.

Underlining the value of collaboration and quick action by investigators, he said it was a cause of concern that the case demonstrated the ease in which such a crime could be committed in post-conflict environments where so-called emergency management was practised, and greater autonomy was provided to staff without sufficient levels of scrutiny and controls.  If, from the outset, the European Agency for Reconstruction and the Reconstruction Pillar of UNMIK had done even the most basic of background checks on Mr. Trutschler, he was unlikely to have been engaged and the whole matter might never have arisen.

Introducing related ACABQ reports, Mr. KUZNETSOV said the Advisory Committee had been encouraged to note that the implementation rate of the 2002-2003 budgets had, for the most part, improved owing to the application of more realistic budgeting techniques.

He then outlined the Advisory Committee’s recommendations regarding specific missions.   On the United Nations Mission in Bosnia and Herzegovina (UNMIBH), the Advisory Committee recommended that the Assembly take note of the report on the Mission’s final disposition of assets.

On the United Nations Peacekeeping Force in Cyprus (UNFICYP), it recommended reductions totalling some $208,300 to the proposed budget for 2004-2005, which fell under civilian personnel and related to the proposed establishment of two new P-2 civilian affairs officer posts and one national post for an information technology assistant.  In view of recent developments, it now remained to be seen whether any revisions would be necessary in respect of 2004-2005 requirements.

Regarding the United Nations Organization Mission in the Democratic Republic of the Congo (MONUC), he said that the ACABQ had been informed that for the current period, additional funds would be needed and that the Secretary-General would submit a note to the Assembly requesting such an assessment.  In its resolution 58/259, the Assembly had appropriated some $59 million for 2003-2004, in addition to the $582 million already appropriated and apportioned.  The additional amount had not been assessed on Member States on the understanding that the Committee would review the situation at the time of its examination of the estimates for 2004-2005.  He recommended $9.2 million in reductions regarding the 2004-2005 proposed budget.

Under military and police personnel, the Advisory Committee had recommended a reduction of some 3 per cent ($6.8 million), as the budget had been prepared on the basis of a six-month rotation period, when, in fact, a large portion of troops rotated after longer periods.  While generally supportive of requests for additional resources, the ACABQ did recommend a reduction in the proposed staffing of the Mission’s Office of Public Information, in light of the significant enlargement approved for the Office for the current period.

The ACABQ had also recommended that resource requirements for national staff take into account a 10 per cent vacancy factor, as opposed to the 5 per cent proposed by the Secretary-General, he said.  Other recommended reductions totalled some $2 million under civilian personnel and about $279,600, regarding the portion of the travel estimate not related to elections and voter registration.  A number of issues relating to MONUC required further study.

Concerning the United Nations Mission in Ethiopia and Eritrea (UNMEE), the Advisory Committee recommended reductions amounting to some $3.1 million.  The ACABQ recommended deferring actions on the proposed conversion of 98 posts from the 300 series to the 100 series of the staff rules, which would entail expenditure of some $2.9 million, pending consideration by the Assembly.  Also recommended was the reduction of some $189,500 under official travel.  However, the Advisory Committee recommended approval of an additional amount of $7 million related to the relocation of UNMEE’s headquarters in Asmara. 

Turning to the United Nations Observer Mission in Georgia (UNOMIG), he said the Advisory Committee recommended a reduction of some $425,300 for 2004-2005.  On staff resources, the reduction reflected the ACABQ’s recommendations against the proposed establishment of a P-3 civilian affairs officer post and additional four local posts.  The Committee also recommended against the proposed reclassification of the Chief of General Services from the P-4 to the P-5 level and recommended deferral of the conversion of 20 individual contractors on special service agreements (SSAs) to fixed-term contracts, pending the conclusion of a management review.  On non-staff resources, the ACABQ recommended deferral of a request to provide general temporary assistance to hire additional security guards.

He regretted that the report on the management review of the Mission’s staffing and organizational structure, conducted in April 2003, had not yet been finalized.  After such extensive delays in the implementation of results, the findings of the review might become irrelevant, since the Mission might be facing new challenges.  He recommended that the Board of Auditors follow up on the Mission’s staffing and organizational structure.  Changes in post levels and in the organizational structure should be postponed pending the release of the review’s findings.

The ACABQ took note of the financial performance report of the United Nations Iraq-Kuwait Observation Mission (UNIKOM) for 2002-2003, he said.  On the United Nations Interim Administration Mission in Kosovo (UNMIK), the Advisory Committee recommended a reduction of some $7.6 million.  The UNMIK was in the process of downsizing and, as a result, the proposed budget showed a significant decrease in both post and non-post requirements.  Regarding an amount of some  $7.6 million included in the proposed budget for the conversion of staff from the 300 to the 100 series of the staff rules, the Advisory Committee had recommended deferring action pending the Assembly’s consideration. 

Regarding the United Nations Disengagement Observer Force (UNDOF), he said the ACABQ recommended a reduction of some $186,400 to the 2004-2005 budget, reflecting the recommendation on the proposed establishment of a P-3 post of Security Officer and the conversion of 13 casual labour positions outsourced to an individual contractor into 14 national posts.  The Advisory Committee had also expressed concern about a sharp increase in unbudgeted travel costs and had called for corrective measures to better control travel expenditures.

On the United Nations Interim Force in Lebanon (UNIFIL), he said the Advisory Committee had recommended a reduction of some $1.78 million to the Mission’s proposed budget.  The ACABQ had not supported the proposed conversion of 45 individual special service agreements into national posts under the 100 series of the staff rules, which would entail expenditure of some $1.35 million.  Also not recommended were proposed additional requirements of some $428,000 for outstanding claims carried over from previous years.

MARGARET STANLEY (Ireland), speaking on behalf of the European Union and associated States, said the European Security Strategy adopted by the European Council last December signalled the European Union’s  movement towards a more strategic approach in the area of external action, including enhancing the Union’s ability to respond to United Nations requests in short-term crisis management situations.  The Union was also establishing the European Union Peace Facility for Africa.  As the largest collective financial contributor to the peacekeeping budget, the European Union would closely examine the budgets of all the peacekeeping missions, as well as the support functions, with a view to providing them with adequate financing.

The European Union wished to discuss with the DPKO their external candidature procedures, she said, particularly, their practices with respect to choosing internal versus external candidates.  The average of 347 days for recruitment fell significantly short of the goal of 120 days.

Regarding results-based budgeting, she noted the need to enhance the capability of existing financial systems to support such budgeting.  The Secretariat should develop a coherent, comprehensive and cost-effective policy on outsourcing services for peacekeeping missions, rather than issuing many individual special service contracts.  The issue of conversion of contracts from the 300 to 100 series had not been presented in a comprehensive way, and more information was necessary.

She said the increasing complexity of peacekeeping made close cooperation of all relevant parts of the Secretariat more necessary than ever. In that regard, she was especially interested in hearing about the interaction between the DPKO and the Department of Public Information (DPI) in the context of peacekeeping.  Welcoming the ACABQ’s thorough evaluation of all peacekeeping budgets, she noted the ACABQ had been very sparse in its budget cuts.  She expected, however, that further savings would be possible.  The European Union was especially concerned about increases in travel and training.  The Support Account needed to demonstrate responsiveness to the level of field activity, and it was essential that that be a salient feature of future peacekeeping support account budgets.

Noting that the ACABQ had been very sparing in its budget cuts, she said she expected that further savings would be possible.  She was especially concerned about the increases in travel and training and trusted that the Secretariat had used its lessons learned from recent complex missions to guard against over-budgeting.  The Support Account needed to demonstrate responsiveness to the level of field activity.  The fact that the Peacekeeping Best Practices Unit had begun to function at full strength should allow the Unit to move rapidly towards its expected accomplishment of increased efficiency and effectiveness in conducting, managing, directing and supporting peacekeeping.

She had some questions regarding the Board of Auditors’ findings concerning procurement, air operations and strategic deployment stocks.  Regarding the Funds Monitoring Tool (FMT), she was concerned that the new policy on allotments for peacekeeping missions did not work as smoothly and flexibly as had been hoped.  The timely replenishment of SDS was also an issue of great concern.  She welcomed the ACABQ suggestion to enhance the role of the SDS Steering Group and its Finance Working Group in order to make it an effective and efficient tool in a coordinated approach to those stocks.  The European Union would consider the proposal to transfer some $11 million from the peacekeeping reserve fund to the Support Account in light of the discussions on new missions.

* *** *

[1]Current 11 active peacekeeping missions are: United Nations Mission for the Referendum in Western Sahara (MINURSO) (also in documents A/58/642 and Corr.1, A/58/657 and A/58/759/Add.2); United Nations Organization Mission in the Democratic Republic of the Congo (MONUC)(also in A/58/684, A/58/701 and A/58/759/Add.10); United Nations Mission in Sierra Leone (UNAMSIL) (A/58/660, A/58/661, A/58/657 and A/58/759/Add.3); United Nations Disengagement Observer Force (UNDOF) (A/58/641, A/58/662 and A/58/759/Add.7); United Nations Peacekeeping Force in Cyprus (UNFICYP) (also in documents A/58/631, A/58/644 and A/58/759/Add.4); United Nations Interim Force in Lebanon (UNIFIL) (A/58/637, A/58/659 and A/58/759/Add.6); United Nations Mission in Ethiopia and Eritrea (UNMEE) (also in documents A/58/633, A/58/658 and A/58/759/Add.8); United Nations Interim Administration Mission in Kosovo (UNMIK) (A/58/634, A/58/638 and A/58/759/Add.5); United Nations Mission in Liberia (UNMIL); United Nations Mission of Support in East Timor (UNMISET); and United Nations Observer Mission in Georgia (UNOMIG) (also in A/58/639, A/58/640 and A/58/759/Add.1).

Documents on UNMIL and UNMISET are going to be introduced later in the session.

Also before the Committee are reports on the closed United Nations Mission in Bosnia and Herzegovina (UNMIBH) (also in documents A/58/632, A.58/720 and A/58/759/Add.11) and the United Nations Iraq-Kuwait Observation Mission (UNIKOM) (also in documents A/58/630 and A/58/759/Add.12)