SECRETARY-GENERAL WILL PRESENT 2006-2007 BUDGET PROPOSAL TO FIFTH COMMITTEE 25 OCTOBER

Background Release

SECRETARY-GENERAL WILL PRESENT 2006-2007 BUDGET PROPOSAL

TO FIFTH COMMITTEE 25 OCTOBER

Secretary-General Kofi Annan will present his budget proposal for 2006-2007 to the Fifth Committee (Administrative and Budgetary) on Tuesday, 25 October.

In forwarding his $3.608 billion budget proposal to the Assembly (documents A/60/6, Introduction and Sections 1-35, Corrs.1-3, Income Sections 1-3), Mr. Annan 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.

The proposed budget is the first to be prepared in conjunction with a shortened biennial programme -– the United Nations policy framework that has been aligned with the two-year budget cycle.  Prepared on the basis of a preliminary $3.62 billion budget outline, the proposals reflect the main priorities for 2006-2007.  Following a thorough review of resources, they include “both a significant adjustment in staffing resources and continued investment in information and communication technology and in staff training”.

Submitted in a results-oriented format, the document places emphasis on achieving results by enhancing performance measurement.  In an effort to strengthen the United Nations, the budget for 2006-2007 reflects continued focus on reallocation of resources, efficiency measures and commitments to identify and dispense with activities that are no longer relevant.

Before recosting, the proposed budget amounts to some $3.6 billion gross ($3.34 billion net), with the following distribution by budget part:

Budget part		2004-2005 revised appropriation	Change		2006-2007 resources (before recosting)
			Amount	Percentage
I.	Overall policymaking, direction and coordination	621 799.7	(4 255.5)	(0.7)	617 544.2
II.	Political affairs	545 130.8	(4 370.7)	(0.8)	540 760.1
III.	International justice and law	75 570.0	1 039.0	1.4	76 609.0
IV.	International cooperation for development	355 738.4	884.8	0.2	356 623.2
V.	Regional cooperation for development	395 309.4	782.5	0.2	396 091.9
VI.	Human rights and humanitarian affairs	189 731.5	(255.3)	(0.1)	189 476.2
VII.	Public information	162 322.6	(307.1)	(0.2)	162 015.5
VIII.	Common support services	477 820.5	(365.1)	(0.1)	477 455.4
IX.	Internal oversight	24 187.0	299.9	1.2	24 486.9
X.	Jointly financed administrative activities and special expenses	91 701.1	6 546.0	7.1	98 247.1
XI.	Capital expenditures	104 566.6	(35 574.2)	(34.0)	68 992.4
XII.	Safety and security	140 037.1	31 644.6	22.6	171 681.7
XIII.	Development Account	13 065.0	—	—	13 065.0
XIV.	Staff assessment	411 194.2	4 207.7	1.0	415 401.9
	Total	3 608 173.9	276.6	0.0	3 608 450.5

After recosting, which involves adjusting the budget to account for inflation and currency fluctuations, proposals amount to some $3.8 billion at preliminary 2006-2007 rates.  In accordance with established practice, the total amount will be adjusted again prior to its adoption by the Assembly.

It is also expected that during the biennium, extrabudgetary resources estimated at $5.6 billion -- a net increase of approximately $184.9 million -- will be utilized for a variety of activities in the areas of conflict resolution, electoral assistance, mine action, dissemination and wider appreciation of international law, central support services and outreach activities at regional disarmament centres, among others.

The Secretary-General states that, while there would be virtually no real growth in resources for the budget as a whole, a range of underlying adjustments have been taken into account.  The staffing table has been reconfigured to strengthen the junior Professional levels while rationalizing the General Service support levels.

With respect to posts, for 2006-2007 a staffing level of 9,528 is proposed under the expenditure sections, compared with 9,538 in 2004-2005.  Overall, there would be a reduction of 10 posts:  a reduction of 92 posts in the General Service category, while key areas would be strengthened through the addition of
82 Professional posts.  Concurrently, 3,019 ineffective, obsolete and marginally useful outputs have been discontinued to make way for new priority measures.

Seeking a comprehensive solution to the problem of additional expenditures arising from inflation and currency fluctuations, the Secretary-General proposes to establish a reserve fund, funded from assessed contributions and replenished through savings due to variations in the forecast included in the budget in respect of currency rates, inflation in non-staff costs and statutory cost increases for staff, or further assessments, as necessary.  The level of $150 million may be considered as a starting point for the fund.

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

The Committee for Programme and Coordination (CPC), in its report (document A/60/16), recommends approval of the narratives of most sections of the budget.  However, it notes that in sections 4 (disarmament), 16 (international drug control, crime prevention and criminal justice), 18 (economic and social development in Asia and the Pacific), 24 (protection and assistance to refugees), and 28 (management and support services), the programmatic narratives, in particular the overview parts, were different from the overall orientation parts of the biennial programme plan for 2006-2007.  In its consideration of the budget, the Assembly should ensure that the narratives are identical to the respective programmes of the plan, including their overall orientation parts.

As the Assembly has adopted several legislative mandates following the formulation of the budget proposal, the CPC recommends that the Secretariat submit a list of new and/or revised mandates during the sixtieth session.  In preparing the strategic framework for the 2008-2009 biennium, the Committee recommended that the Secretary-General take all legislative mandates fully into account.

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.  For instance, further improvements would be required to clarify to what extent the outputs contribute to the attainment of objectives and expected accomplishments.  The CPC also stressed the importance of assigning responsibility for the achievement of results to programme managers, requesting the Secretary-General to further strengthen mechanisms to monitor, evaluate and measure the results and impact of activities.

The ACABQ, in a related report (document A/60/7), notes that the estimates pertaining to a number of sections might be significantly affected by the latest decisions on reform.  Moreover, the Secretary-General intends to submit revised estimates for the Office of Internal Oversight Services (OIOS), and the Assembly will have before it an implementation report on the newly created Department of Safety and Security.  Revised estimates are also to be submitted on the International Trade Centre UNCTAD/WTO.  In the meantime, the ACABQ has adopted a step-by-step approach and has dealt with estimates before it on their own merit.

While pointing to the need to go beyond incremental budgeting and evaluate the entire “quantum of resources” necessary to carry out mandated programmes and activities, the Advisory Committee is, by and large, in agreement with the overall proposed budget level.  Reductions recommended by the Advisory Committee regarding posts and possible economies would not significantly affect the total amount of the budget.  The ACABQ stresses, however, that in the period of restrained budgetary growth, it becomes increasingly important to ensure that resources are used to effectively meet changing priorities.

With staff costs for the biennium estimated at some $2.2 billion and extrabudgetary posts at $2.17 billion, the ACABQ stresses the importance of efficient and effective management of human resources.  On the whole, it discerns a lack of central direction in the management of the staffing table.  Advocating resource planning in the Secretariat on an Organization-wide basis, the ACABQ states that the responsibility in this respect should be clearly defined.  The Administration has not fully exercised its authority to manage staffing Organization-wide, and considerably greater administrative flexibility and creativity are needed.  As the departments do not “own” particular posts at particular grade levels, it is necessary to view the allocation of posts as dynamic, rather than static.

Reiterating its recommendation that the Secretariat should be managed as a whole, the Advisory Committee recalls the outcome of a 50-post redeployment “experiment” that was authorized by the Assembly two years ago.  After an initial failure to identify any surplus staffing resources, five posts were identified for redeployment on a permanent basis.  Another 12 posts were to be redeployed under temporary administrative arrangements to meet immediate needs by utilizing vacant posts pending completion of recruitment.  While welcoming these developments, the ACABQ expresses disappointment that the Assembly’s directives have not been more fully implemented.

With the Office of Human Resources Management initiating complex, often piecemeal, solutions to old problems, personnel management in the Organization has become so convoluted that very few managers actually understand how the system works, the Advisory Committee states, expressing its intention to take up human resources management comprehensively at the sixty-first session of the Assembly.

Among the most important issues, the Advisory Committee mentions the question of accountability.  Until and unless there are sanctions in place for failure to perform, accountability measures will have no real impact, the ACABQ states.  The ACABQ recalls, in this connection, that the Assembly has requested the Secretary-General to enhance managerial accountability “with respect to human resources management decisions, including imposing sanctions in cases of demonstrated mismanagement of staff and wilful neglect ... of established rules and procedures”.  The Advisory Committee believes that the notion of sanctions should be broadened to apply not only to human resources decisions, but also to performance as a whole in accordance with results-based principles.

In fact, many of the Advisory Committee’s comments are directed at results-based budgeting.  While expressing appreciation for the improvements made, the ACABQ emphasizes the need to avert the risk of it becoming a paper exercise.  Indicators of achievement and performance measures often appear to be written to meet the requirements of the budget process, rather than to reflect the management plan of the entities involved.  It is time to begin using results-based budgeting to improve both management and accountability in the Secretariat, to allow the Assembly to shift its attention to policy-setting, and to focus on the results to be expected from the investment of the required resources.  Without an effective system for programme planning, monitoring of budget implementation, evaluation and performance reporting, these intended shifts will be compromised.

The ACABQ further recalls the Secretary-General’s proposal that the Assembly review the current distribution of functions and responsibilities to restore the balance that was envisioned when the Organization was established.  It is the prerogative of Member States to make policy, confer mandates, specify results desired and allocate resources.  The Secretariat’s proper role is to execute the policies adopted by Member States without attempting to legislate its own policy directives.

As for the role of the Secretary-General, in the opinion of the Advisory Committee, heshould exercise his authority under the Charter.  That would lessen the tendency for the Assembly to “micromanage” and would also better enable it to focus on policy issues.  The ACABQ, therefore, urges the Assembly to strengthen the Secretary-General’s role as chief administrative officer by granting him the flexibility necessary to effectively manage the Organization and by encouraging him to fully utilize his authority, it being understood that all actions must be consistent with the Staff Rules and Financial Regulations.

The Committee will also have before it a report of the Secretary-General containing revised estimates to the 2006-2007 proposed budget (document A/60/303) in connection with the adoption of a resolution on the administration of justice in the Secretariat (resolution 59/283) last April.  According to the document, the net expenditure requirements arising from the implementation of this text are estimated at some $2.41 million.  Out of that amount, some $1.06 million would be required for the panel of external experts to consider redesigning the system of administration of justice.  Members of the panel would be supported by one legal consultant and two staff members (one post at a P-5 level and one General Service (Other level) post).  The panel is to start its work no later than 1 February 2006 and to submit its findings and recommendations by the end of July 2006.

The amount of $945,400 relates to the proposed measures to continue and expand the outreach activities of the Office of the Ombudsman.  While the proposed budget for 2006-2007 provides for the continuation of the existing posts and the establishment of four new posts (one P-5 post for a Senior Conflict Resolution Officer, one P-3 post for an Information Advocacy and Outreach Officer, and two General Service (Other level) posts), it is proposed to create three Ombudsman branch offices, in Geneva, Vienna and Nairobi, headed by Chiefs at the D-1 level.

To ensure independence of the United Nations Administrative Tribunal (UNAT), the report also refers to a transfer of the Tribunal’s resources in the amount of $1.69 million from section 8, Legal affairs, of the proposed budget, to section 1, Overall policymaking, direction and coordination, effective from the beginning of the biennium.  Also according to the document, additional staff are needed to undertake the review of statutes, rules and recent jurisprudence of other tribunals.  In order for UNAT to perform its functions in an independent manner, it would be necessary to establish a separate UNAT administrative office comprising one Administrative Officer and one Administrative Assistant.  In order to meet expected additional workload, general temporary assistance would also be required.  Estimated costs for the above activities would amount to $368,200.

Commenting on this document, the ACABQ, in a related report, (document A/60/7/Add.1) states that it looks forward to the redesign panel’s findings and recommends approval of $740,800 for its activities.  However, it recommends against the provision of an additional $104,800 for consultant and expert services at this time, stating that any additional requirements could be reflected in the first performance report.  The panel itself should determine what external expertise may be required and that service from within the Secretariat should generally be the first recourse.

In regards to the Administrative Tribunal, the Advisory Committee recommended against the creation of two additional posts.  It also recommended complete separation of the secretariat of the Administrative Tribunal from the Office of Legal Affairs and its placement under section 1 of the budget to safeguard the independence of the Administrative Tribunal.  Also recommended is the approval of additional resources ($129,000) to support the Tribunal’s efforts to clear its backlogs and ensure future efficiency.

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For information media • not an official record