FIFTH COMMITTEE TAKES UP REFORM PROPOSALS ON BUDGET IMPLEMENTATION, INFORMATION TECHNOLOGY, FINANCING MANAGEMENT, REPORTING MECHANISMS

Sixtieth General Assembly

Fifth Committee

60^th Meeting (AM)

FIFTH COMMITTEE TAKES UP REFORM PROPOSALS ON BUDGET IMPLEMENTATION,

INFORMATION TECHNOLOGY, FINANCING MANAGEMENT, REPORTING MECHANISMS

The United Nations had been criticized for its weak financial controls, for poor management of its resources, for not keeping up to date with best practices in accounting standards and information technology management, for not generally meeting the expectations of Member States, United Nations Controller Warren Sach told the Fifth Committee (Administrative and Budgetary) this morning.

Introducing the first series of detailed Secretary-General’s reform reports that had been requested by the Assembly in its resolution 60/260 of 8 May, he said that the proposals before the Committee were aimed at addressing those weak points.  Some proposals required immediate action if the Organization was to start moving forward with multi-year projects.  “All proposals are necessary if we are to deal with the current financial situation and if we are expected to meet the challenges ahead”, he said.

Previously, in his report entitled “Investing in the United Nations:  for a stronger Organization worldwide”, the Secretary-General had outlined 23 broad reform proposals for a fundamental overhaul of the United Nations that responded to the requests addressed to him by world leaders at the September 2005 Summit.  The documents introduced today present the Secretary-General’s vision of change in the areas of information and communication technology; budget implementation; financial management practices; and measures to improve reporting mechanisms, including public access to United Nations documentation.

Regarding resource requirements for the proposed measures, the Controller said that the total amount of $6.38 million comprised $2.55 million for information and communication technology improvements; $2.01 million for the adoption of the International Public Sector Accounting Standards (IPSAS); and $1.82 million for public access to United Nations documentation.  Those requirements would enable the Organization to start the process of updating, standardizing and improving the management systems.  In the long run, there would be substantial additional costs in the next biennium -- $23 million for IPSAS and $120 million for the next-generation enterprise resource planning system.

Speaking on behalf of the European Union and associated States, the representative of Austria listed the establishment of a post of Chief Information Technology Officer, replacement of the Integrated Management Information System, introduction of new accounting standards, increased efficiency, effectiveness and accountability in budgetary implementation among the main priorities.  There were also too many restrictions on the senior management in terms of how it was authorized to manage and deploy the resources at its disposal.  While such restrictions generally failed to achieve adequate control and accountability, they did put a strain on efficient programme delivery.

In order to give the Secretary-General the necessary tools to implement the budget efficiently and to fully preserve the prerogative of the Assembly, it was necessary to implement the Secretary-General’s limited discretion in budget implementation that had been decided in the budget resolution for 2006-2007, he said.  While the proposals before the Committee in this regard were very modest in nature and fell behind the original proposals, they went in the right direction.  Any changes to the present system needed to preserve the prerogative of the Assembly to consider and appropriate resources.  In the context of improved transparency and accountability, the Union also supported proposals to improve the current reporting mechanisms.

With the United Nations being a multi-billion dollar enterprise, “how can you manage this organization efficiently, when the full powers granted to the Chief Administrative Officer to redeploy resources are so narrow”? Norway’s representative asked.  All Member States recognized that there was a need for the Secretary-General to have limited discretion in budget implementation.  There was also agreement that there had to be clear accountability mechanisms on how that discretion would be exercised.  It was necessary to define the parameters.  She also agreed that a prerequisite for good management was an updated and integrated information and communications technology.  The Organization would benefit from having guidelines for public access to United Nations documentation.

The representative of Australia, who also spoke on behalf of Canada and New Zealand, said that the delegations he represented were strongly committed to increasing the managerial discretion of the Secretary-General.  In considering the Secretary-General’s proposals in that regard, he urged the delegates to address the real issue at hand:  what was the best place for certain operational decisions to be taken? Recognizing the need for appropriate accountability with greater managerial discretion for the Secretary-General, he said that while the two issues were complementary, they were also very complex.  Accountability should, however, not be used as a slogan that impeded doing what made managerial sense.

While agreeing with the need for reform, Pakistan’s representative stressed that such measures could be successful only in an environment of trust.  He was surprised by the enormous desire for reform at the time when the United Nations was on the verge of financial collapse.  The solvency of the Organization should be first ensured.  Without that, the talk about reform was a “disconnect from reality”.  The first priority should be removing the conditionalities that had poisoned the atmosphere.

As the Committee turned to the Capital Master Plan, the Assistant Secretary-General and Executive Director for the project, Louis F. Reuter, presented a report that has been prepared in response to a request in resolution 60/256 of 8 May 2006 for a more detailed business analysis on the possibility of constructing a new permanent building on the North Lawn.  Stressing that the funding approval for the Capital Master Plan was now becoming critical, he said that, in order to prevent further cost escalation for the inevitable renovation of the existing buildings, Member States should act without further delay on the recommended phased strategy for the implementation of the Capital Master Plan, leaving consideration of the possibility of a permanent structure on the North Lawn for a later date.

In that connection, the representative of Austria, on behalf of the European Union, insisted that the Committee must be guided by the principle of “no further delays”.  Erected in 1951, the United Nations Headquarters had outlived its natural life-span and was now a safety hazard.  It wasted energy and was in constant need of repair.  A decision on the strategy was needed to avoid the postponement of the construction start, scheduled for next summer.  It was in all Member States’ interest to avoid any further delays, not only because of related cost escalation, but because of the life-endangering conditions of the Building.

Also this morning, via videoconferencing, Juan Luis Larrabure, Inspector, Joint Inspection Unit (JIU), introduced that body’s report on “Policies of the United Nations system organizations towards the use of open source software in the secretariats”.  Kenneth Herman, Senior Adviser on Information Management Policy Coordination of the Secretariat of the United Nations Chief Executives Board for Coordination, presented the Board’s comments on that matter.  Reports on the financing of the International Criminal Tribunal for the Former Yugoslavia were introduced by Katrina Nowlan, Chief of Service III of the Programme Planning and Budget Division.  Several reports of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) were introduced by its Chairman, Rajat Saha.

Statements were also made by representatives of the United Kingdom, Mexico, Germany, France, Italy, Belgium, and the United States.

The Committee will continue its debate on the reform reports at 10 a.m. Monday, 19 June.

Background

The Fifth Committee (Administrative and Budgetary) met this morning to begin its consideration of the Secretary-General’s detailed reports on the reform proposals and to take up reports on the use of open source software, Capital Master Plan and financing of the International Criminal Tribunal for the Former Yugoslavia.

The Committee had before it the first series of detailed Secretary-General’s reform reports (documents A/60/846 and Adds.1-4) that had been requested by the Assembly in its resolution 60/260 of 8 May.  Previously, in his report entitled “Investing in the United Nations:  for a stronger Organization worldwide”, the Secretary-General had outlined 23 broad reform proposals, of both a short-term and longer-term nature, that responded to the requests addressed to him by world leaders at the September 2005 Summit.

The four addenda to the report present the Secretary-General’s vision of change in the areas of information and communication technology; budget implementation; financial management practices; and measures to improve reporting mechanisms, including public access to United Nations documentation.  Overall financial impact of the proposals contained in document A/60/846/Adds.1-4 would amount to some $6.38 million, including an increase of eight posts.

One of the requests contained in resolution 60/260 related to the need to define accountability and propose clear accountability mechanisms, clear parameters for their application and the enforcement at all levels.  In this connection, the Secretary-General states that for the purpose of the current report, the Secretariat has borne in mind that “the basic accountability framework, mechanisms and instruments for enforcement remain as defined and outlined” in the report on measures to strengthen accountability at the United Nations (document A/60/312).  Accountability arrangements will be further addressed in future reports, including those on human resources and the administration of justice.

According to the document, greater accountability can be achieved through transparency in management systems due to the new strategy in the area of information and communication technology, exercising limited discretion in budget implementation, enhancing financial management arrangements, and improving reporting mechanisms.  More transparent handling of information through modern enterprise resource planning and content management systems will enhance the Organization’s ability to build and trace audit trails and generate analytical reports for the Secretariat and the oversight machinery.  Introduction of new accounting standards and a new enterprise resource planning system will provide “a quantum increase in accountability”.  It is anticipated that, through the use of new standards and systems, by the end of 2010 it will be possible to provide a full attestation to the effectiveness of United Nations financial controls in the financial report.

Addendum 1 to the report addresses the Secretary-General’s proposal for an urgent upgrading of Secretariat-wide information and communication technology systems and provides detailed information on the request to create a new senior position of Chief Information Technology Officer.  Given the magnitude of resources the Organization spends on information and communication technology, such a post is considered vital, as the incumbent would be responsible for developing the information and communication technology strategy, operational policies and procedures, and the most appropriate structure for the service.

In connection with the proposal, the Secretariat has initiated an in-depth fact-finding study and will provide costing and a timetable for upgrading the information and communication technology systems during the Assembly’s next session.  Regarding the information and communication technology history of investments, the report states that regular budget expenditure dedicated to information and communication technology now amounts to over $100 million per annum.  Historically, the Integrated Management Information System (IMIS) project required an overall investment of $123.7 million.  Investments have also been directed to such applications as the Integrated Monitoring and Documentation Information System (IMDIS), the Department of Peacekeeping Operations field systems, and Galaxy.  The Organization has also progressively provided requisite infrastructure for all duty stations.  The payback from these investments will be fully realized with the implementation of a timely global enterprise planning and content management system.

Although total costs amounting to some $154.96 million (as of December 2003) reflect investments in some systems subject to replacement, the Secretary-General states that this should not suggest monies lost.  Each given application has served its specific purpose, which was largely to support functions not covered by the IMIS.  As for the IMIS itself, the report recommends, among other things, replacing this system with a next-generation resource planning tool.  Also, during the sixty-first session, the Secretary-General should be requested to submit a comprehensive report outlining the scope, timetable, strategy and detailed resource requirements for replacing IMIS no later than 2009.

On budget implementation (Addendum II), the Secretary-General draws attention to the fact that, despite serving as the chief administrative officer of the Organization, he has no authority to shift any money between programmes, or from staff to non-staff costs, without prior approval of Member States.  This flexibility has, however, been granted to many heads of specialized agencies, funds and programmes.  In line with recent decisions of the Assembly, the Secretary-General sets out his proposals for limited discretion in budgetary implementation to enable him to carry out his managerial responsibilities effectively.

Presented for the Assembly’s approval is a proposal that would allow the Secretary-General to transfer up to 10 per cent of appropriations between sections of the budget, within parts, to meet emerging demands, reporting thereon in the context of budget performance reports.  The Secretary-General also proposes that, within the approved staffing table for the Secretariat for a given budget period, authority be granted for redeployment, reclassification and conversion of up to  10 per cent of posts within and between several broad categories.  The Secretary-General is not seeking any discretionary authority with regard to the creation or suppression of posts.

Addendum III addresses concerns expressed by the General Assembly, the Advisory Committee on Administrative and Budgetary Questions (ACABQ), the Board of Auditors and the Panel of External Auditors with respect to the need for efficient and effective management of the Organization’s resources.  The proposals reflect ongoing efforts by the Secretary-General to ensure a sound financial base for the United Nations, rationalize administrative processes, and improve financial reporting, accountability and transparency.  The proposals are also aimed at facilitating financial decision-making by Member States on the basis of greater predictability of the level of contributions on which they will be assessed.

In addition to the adoption of the International Public Sector Accounting Standards (IPSAS), the document advocates consolidation of various peacekeeping accounts, excluding those of the United Nations Emergency Force, the United Nations Operation in the Congo, the Peacekeeping Reserve Fund and the strategic deployment stocks; consolidation of various peacekeeping financing resolutions into a single text; presentation of all peacekeeping dues in two annual assessments; increase in the level of the working Capital Fund to $250 million; establishment of a reserve fund for adjustments in connection with currency fluctuations, inflation and statutory cost increases for staff; and introduction of interest charges on Member States’ debt to the United Nations.

Measures to improve the Organization’s reporting mechanisms are addressed in Addendum IV.  Information is currently provided to the Assembly in a number of separate reports and by a variety of offices, with over 150 management-related reports and financial statements produced per biennium.  It is anticipated that the submission of an annual report that links policy priorities, programme activities, resources and management challenges would allow for better assessment of the Organization’s performance and management of resources.

Also outlined in the document is a proposed new policy of public access to the United Nations documentation, which has been designed to improve transparency within the Organization.  Currently, the Secretariat’s regulatory framework in respect of public access to documentation is neither clear, not systematic.  Existing rules confirm that such documents “are presumably releasable to the public upon request”.  However, those instructions and bulletins do not precisely set forth the criteria that are to be applied to refuse access to any given document.  Moreover, a person denied access to a document has no remedies, as there is no review mechanism.

Under the proposed policy, all United Nations departments and offices will make available to the public any document produced or received, subject to several exceptions defined in the report.  While the publication of official documentation in the Organization’s six languages will continue, the documents to be made accessible to the public will be available in the language in which they were generated or received by the Organization, unless they have already been translated.  All requests for documentation would be addressed to an office to be created within the Department of Management, which would refer them a proper department or office.  The latter should respond promptly to all requests, and all denials must be justified.  The applicant would have the possibility to seek reconsideration from an internal committee.

The Committee also had before it a Joint Inspection Unit (JIU) report (document A/60/665), which presents a review of the phenomenon of open source software (OSS) and includes a survey of the policies and practices in use for this type of software in a selection of Member States and across the system.

According to the document, OSS has evolved from a popular tool in academia and a hacker’s phenomenon.  As opposed to closed source software (CSS), or proprietary software (such programmes as Microsoft Office or Internet Explorer, for which the author holds exclusive rights and considers the source code to be a trade secret), the term OSS refers to computer software available with its source code and under an open source license, which permits anyone to study, change, improve, share and distribute the software.  In recent years, the OSS has been recognized as a valid alternative to CSS and an attractive business endeavour.  Most OSS solutions do not carry a licence fee and are freely downloadable from the Internet.

The JIU states that OSS availability contributes to widening the choice of software and avoiding vendor lock-in by fostering competition on the market.  The report highlights increasing use of such software by public administrations worldwide and points out some of the requirements to be met by United Nations system organizations if they intend to make more use of OSS as indicated in the new system-wide United Nations information and communication technology strategy.

By linking open source software to information access, the document makes the case that United Nations system organizations should more closely embrace OSS to ensure that all stakeholders have access to electronic information without having to purchase specific software products.  It also presents a series of recommendations on steps that United Nations system organizations could take to explore the advantages offered by OSS.  In addition, the report seeks to promote enhanced sharing of computer-based information across the United Nations system through the use of this type of software.

While broadly acknowledging the usefulness of open source software and the opportunities it presents, members of the United Nations System Chief Executives Board for Coordination (CEB) -- whose comments are included in the addendum to the report (document A/60/665/Add.1) -- note that the document addresses issues outside the scope of a study of OSS use and does not devote sufficient attention to the issues surrounding the implementation of open source software.  They believe further in-depth analysis is needed to properly develop a system-wide direction on this important topic.

In connection with the Capital Master Plan, the Committee had before it a report presented in response to a request in resolution 60/256 of 8 May 2006 for a more detailed business analysis on the possibility of constructing a new permanent building on the North Lawn (document A/60/874).

According to the document, an initial business analysis has been conducted, which indicates a cost advantage in the long term.  There would be commercial advantages for the United Nations derived from constructing and owning a building as compared to long-term leasing.

In preparing the analysis, the assistance of an outside consultant experienced in the New York City real estate market was sought, along with that of the consulting firm retained by the Capital Master Plan project as the programme manager.  The consultants were requested to estimate the costs of construction, based on two scenarios in terms of date of occupancy of the building:

(a)  Estimated occupancy in 2015, that is, completion of a new permanent building in eight years, assuming timely approvals of the feasibility, planning, design and construction process;

(b)  Estimated occupancy in 2023, which is the expiry date of the long-term lease agreements between the United Nations and the United Nations Development Corporation (UNDC) for the UNDC-1 and UNDC-2 buildings.  The consultants were also requested to identify savings that would arise in terms of rent that would not have to be paid for the UNDC buildings or other commercially leased office space occupied by the United Nations system.

The estimates indicate that, should be Organization follow the first scenario, the total project cost of constructing a permanent building on the North Lawn would amount to $626.8 million.  In this case, total projected avoided lease cost for the period from 2015 to 2023 is $255 million.  Should the 2023 occupancy date be selected, the cost of the project would amount to $939 million.  The projected average annual avoided lease cost for the period from 2023 to 2037 is $67 million.

The Secretary-General recommends that the matter be considered independently from the renovation of the United Nations Headquarters buildings, given the urgency of that renovation.  A decision of the General Assembly is sought on the implementation of the Capital Master Plan and a strategy as set out in the report of the Secretary-General (documents A/60/550 and Corrs.1 and 2 and Add.1).  It should be noted that the Secretary-General has recommended the adoption of a phased approach to the plan (strategy IV).

The Committee also had before it the Secretary-General ’s report on the financing of the International Criminal Tribunal for the Former Yugoslavia (document A/60/844), which contains additional requirements in the amount of $896,600 in connection with expected appointment of up to three reserve judges for the biennium 2006-2007.  Reserve judges would be appointed by the terms of Security Councilresolution 1660 (2006) of 28 February 2006, by the terms of which it decided to amend articles of the Tribunal’s Statute and authorize the Secretary-General, at the request of the President, to appoint reserve judges from among the elected ad litem judges, to be present at each stage of a trial to which they have been appointed and to replace a judge if that judge is unable to continue sitting.

The Secretary-General also indicates in his report that every effort will be made to meet the additional requirements within the current appropriation, and the actual expenditures will be reported in the context of the second performance report for the biennium 2006-2007.

The Advisory Committee, in a related report (document A/60/854) states that it has inquired as to whether the closure of the Milosević case had been taken into account in making the proposal for reserve judges.  The ACABQ was informed that, following the death of Mr. Milosević, the judges of the relevant trials section were reassigned to another case and the closure of the Milosević case had no impact on the need for reserve judges.

The Advisory Committee recommends that the Assembly take note of the report of the Secretary-General and request him to submit any additional requirements that might arise from the appointment of the three reserve judges in the context of the second performance report for the biennium 2006-2007.

Introduction of Documents

United Nations Controller WARREN SACH introduced the Secretary-General’s reform reports, saying that the Organization had been struggling for a number of years now to meet the many challenges before it.  The number of peacekeeping operations had increased dramatically, and much was expected of the Organization in its efforts to promote the Millennium Development Goals.  At the same time, the Organization’s management system was inadequate, with limited capacity, controls, discretion, robustness or transparency, to be able to handle multi-billion dollar global operations.  Detailed proposals in the report were aimed at addressing those problems.

Doing things piecemeal was not cost-effective, he said in connection with the proposals on the information and communication technology.  Fragmentation of information and communication technology systems throughout the Organization had been allowed for too long.  There was an urgent need for an upgrade and standardization of Secretariat-wide information and communication technology systems.  Operating under current conditions was rapidly becoming more costly and carried with it the risk of serious consequences, including weak financial controls.  He also urged Member States to provide the necessary resources to facilitate the information and communication technology leadership role, which was currently under-resourced.  A new post was sought as there was no available post at the right level to deploy to that function.

On the proposed adoption of IPSAS, he said that such a step would improve the quality, consistency and comparability of the United Nations financial reporting.  That was an important innovation, which all entities of the system had agreed, at the executive Head level, to move to adopt.  Approval of the IPSAS would be the first step for the Organization to move forward to have it in place by 2010.  Resources were being sought for the commencement of the project during 2006-2007.  “We cannot afford to delay action on this proposal if the target of 2010 is to be met and transparency is to be enhanced”, he said.

Continuing, he said that he would like to dispel a misunderstanding which seemed to exist that the consolidation of peacekeeping accounts into a single one would, in some way, lead to subsidizing those who delayed payment.  Delayed payment of peacekeeping assessments damaged peacekeeping operations, but not through subsidy of bad payers by good ones.  The impact of late payment patterns was, however, an egregiously unfair and underserved transfer of burden to troop contributors.  It was the troop contributors who suffered when peacekeeping dues were paid late.  The proposal before the Committee would substantially solve that long-standing problem and improve the overall financial health of United Nations peacekeeping.  Maintenance of the status quo would continue to subject troop-contributing countries to delayed reimbursements.

An increase in the peacekeeping commitment authority from $50 million to $150 million was being proposed, because the current authority was inadequate to cover mission planning and start-up, as well as the replenishment of strategic deployment stocks.  The proposed increase would not change the current governance and oversight arrangements of pre-mandate commitment authority.  No additional funding from Member States would be required, and prior concurrence of the Advisory Committee would continue to be required.  As for the Working Capital Fund, its level had not changed since 1981, and the proposed increase from $100 million to $250 million was long overdue.

On accountability, he said that he understood that a number of Member States would have liked to see more on that topic at this time.  While some aspects of that issue had been addressed in the reports before the Committee, a separate addendum to the report would be issued to articulate a definition of accountability.  Accountability arrangements would also be further addressed in future reports on human resources management and the administration of justice.

Regarding resource requirements for the proposed measures, he said that the total amount of $6.38 million comprised $2.55 million for information and communication technology improvements; $2.01 million for the IPSAS; and $1.82 million for public access to United Nations documentation.  Those requirements would enable the Organization to start the process of updating, standardizing and improving the management systems.  In the long run, there would be substantial additional costs as progress was made on a new enterprise resource planning and IPSAS in the next biennium -- $23 million for IPSAS and $120 million for enterprise resource planning.

Presenting the ACABQ report on that matter, ACABQ Chairman RAJAT SAHA said that, in his report, the Secretary-General had discussed the issue of accountability in some detail.  While welcoming the steps taken thus far, the Committee noted that a complete system of accountability would require further development and requested that the Secretary-General give priority to that issue in the elaboration of reform measures.  Emphasis should be given to the development of a clear definition of accountability in all areas, including finance, administration and human resources management, tools to implement accountability, an effective system for administration of justice and consistent regulations and rules.

As to the proposals on information and communication technology, he recommended approval of the creation of the function of Chief Information Technology Officer, on the understanding that the incumbent would lead an office which would integrate the information technology services of the Department of Management and the Communication and Information Technology Service of the Department of Peacekeeping Operations and provide Secretariat-wide leadership.  The ACABQ was also of the view that the function should be accommodated through redeployment of a post at the Assistant Secretary-General level.

A decision on the replacement of IMIS with a next generation enterprise resource planning system could be made only after the Secretary-General had submitted his detailed report on the matter to the Assembly at its next session and extensive deliberations on the subject had taken place, he continued.  The Advisory Committee recommended approval of the resources requested to carry out the envisaged study and prepare the report.

In the past, the Committee had called for the Secretary-General to be given greater flexibility in budget implementation, he continued.  However, the proposals in the current report were not sufficiently clear or specific to be acted upon at this stage.  Accordingly, the ACABQ had recommended that the Secretary-General rework his proposals to provide a full analysis and justification of the scope and level of discretionary authority requested, including information on any instance in which the need for greater discretionary authority was made evident.

On the proposal that the Secretary-General be granted the authority to undertake redeployment, reclassification and conversion of posts, within the approved staffing table as a whole, he said that the ACABQ had consistently supported greater discretional authority in that area and had put forward a number of recommendations which the Assembly had yet to pronounce itself on definitively.  Any proposal to redeploy up to 10 per cent of posts had a link to the proposal concerning transfers between budget sections, and as such needed to be clarified.

The Advisory Committee recommended the adoption of the IPSAS and approval of requested resources to begin implementation, he said, with the stipulation that expenditure relating to the information technology aspects of implementation should await a definitive decision by the Assembly on the system to be used.  On the consolidation of peacekeeping accounts and related proposals, the Advisory Committee had been provided with a revised proposal, which would address the issue of maintaining the link between peacekeeping assessments and specific mandates approved by the Security Council.  However, a more fundamental problem remained, in that, since peacekeeping operations had a history of problems with withheld or late payment, those Member States that paid their assessments promptly and in full would be subsidizing those who did not.  Thus, it was for Member States to decide whether the managerial consolidation outweighed that basic fact.

The ACABQ recommended that the current procedures for granting of commitment authority be maintained in view of, among other things, the fact that the Secretariat could cite no instance in which the current $50 million ceiling had proven insufficient.  On the utilization of budgetary surpluses, the Advisory Committee pointed out that the Assembly had yet to take a decision on the proposed measures to fund accrued liabilities for after-service health insurance benefits, which included proposals to utilize budget surpluses.  Therefore, action on that matter should await a decision of the Assembly on that matter.

Welcoming the Secretary-General’s intention to prepare and submit a single comprehensive annual report containing both financial and programme information, he said that there was a need to more clearly define the purpose of such a report and the target audience.  For the time being, the Secretary-General should concentrate on developing a comprehensive financial and programme report for the Assembly, while continuing to produce the annual report on the work of the Organization pursuant to Article 98 of the Charter.  He also welcomed efforts to consolidate reports, while pointing out, however, that the bulk of proposed consolidation was dependent on a decision of the Assembly on the proposals to consolidate the financial performance reports and budgets of peacekeeping operations.  The ACABQ trusted that the text of the new public access policy, when it was fully elaborated, would be made available to the Assembly, and stressed the importance of exploring the possibility of a fee structure and financing mechanisms, where appropriate.

JUAN LUIS LARRABURE, Inspector, Joint Inspection Unit (JIU), introducing that body’s report on “Policies of the United Nations system organizations towards the use of open source software in the secretariats” (document JIU/REP/2005/3), said the Unit recommended that the Assembly emphasized the principle of equal and universal access to information of the United Nations, without the user having to acquire any type of software.  Dependency on particular software providers should be avoided.  It was also recommended that the Secretary-General consult with relevant stakeholders to establish an intra-system operability framework based on open standards.

He said customized software should be owned by organizations themselves and be made available to other organizations as OSS.  Organizations should avoid vendor lock-in.  It had been found that the choice of open software solutions had been determined by individual initiatives and that there was no corporate strategy.  He noted that there still seemed to be resistance to change in some organizations and that the current environment often rewarded a conservative approach.  He urged to move towards rewarding creativity and cost efficiency.  The report did not advocate blind use of OSS, but emphasized the need to seriously consider that alternative.

KENNETH HERMAN, Senior Adviser on Information Management Policy Coordination of the Secretariat of the United Nations Chief Executives Board for Coordination, commenting on document A/60/665/Add.1, said very few topics in the information and communication technology arena generated as much passionate debate as the use of OSS in a business environment.  Suddenly, major cost factors had become irrelevant.  Everyone concerned with the issue needed to remember, however, that open source did not translate to no-cost.  All software, no matter how complex, required configuration and adaptation to the business environment, and those costs frequently eclipsed the price of the software itself.

As the software had no “owner”, there was no fixed point of contact for problems solving.  One’s own capacity had to be developed or outside assistance had to be found, he said, adding, “Making the decision to utilize such a product, and perhaps have some part of your operation depend on its performance, becomes much more complicated.”  However, obstacles like those could be overcome.  The report opened the door for a more rigorous examination of the issues surrounding the selection of technology solutions.  The JIU had taken the first steps towards a serious discussion on how organizations could make the best use of open source.

He said that next steps for the system included more closely investigating how organizations could reap the benefits promised by the open source movement, as well as mitigate the risks.  That needed to be done within a context of other important information and communication technology endeavours.  The system needed to decide where the implementation of OSS, beyond its already deep penetration within the operations of organizations, fits amongst other information and communication technology-related priorities.

Statements

Speaking on behalf of the European Union and associated States, ENNO DROFENIK ( Austria) noted that further addenda on accountability and procurement were forthcoming and said that he would address those issues at a later date.  The report of the Secretary-General corresponded to the mandate set out at the World Summit last year.  While regretting that detailed elaboration of some reform proposals was not before the Committee, he believed that the report still provided enough substance for a meaningful discussion on management reform.  Among the Union’s priorities, he noted the establishment of a post of Chief Information Technology Officer, who would be responsible for coordinating the information and communication technology initiatives within the Secretariat and ensure that an adequate information and communication technology perspective was incorporated in all major managerial decisions.  While the organizational structure still needed to be developed, he would like to emphasize the need for a largely independent position within the Secretariat.

He supported the replacement of the IMIS, which had served the Organization relatively well in the past.  In light of the increasing demands on the system, the proposed introduction of new accounting standards and a growing number of shortcomings vis-à-vis available off-the-shelf solutions, the replacement had become a necessity.  It should be the first task of a new Chief Information Technology Officer to accurately establish the user needs for a new system and to prepare the invitation for tenders. The European Union supported the introduction of IPSAS, as the current United Nations system did not meet the needs of modern, transparent and accountable Organization.

Among other priorities, he listed increased efficiency, effectiveness and accountability in budgetary implementation.  There were too many restrictions on the senior management in terms of how it was authorized to manage and deploy the resources at its disposal.  While such restrictions generally failed to achieve adequate control and accountability, they did put an under strain on efficient programme delivery.  In order to give the Secretary-General the necessary tools to implement the budget efficiently and to fully preserve the prerogative of the Assembly, it was necessary to implement the limited discretion decided upon in the budget resolution for 2006-2007.  While both proposals before the Committee, in that regard, were very modest in nature and fell behind the original proposals, they went in the right direction.  The Union supported those proposals.  In line with the parameters agreed, it was necessary to ensure that the Secretariat was fully accountable to the Assembly for any use of its discretion.  Any changes to the present system needed to preserve the prerogative of the Assembly to consider and appropriate resources.

He added that the ACABQ raised some pertinent questions about the scope of the discretion to be granted to the Secretary-General and the accountability procedures under which it would operate.  It asked the Secretary-General to provide clarification on those points.  The Union believed that it was within the purview of Member States to specify the scope of discretion and the accountability mechanisms which accompanied it, and he was ready to provide language to do that.

In the context of improved transparency and accountability, the Union supported proposals to improve the current reporting mechanisms, he said.  He looked forward to further clarifications on the proposed new annual report and supported the ACABQ recommendation for the Secretary-General to concentrate on developing a comprehensive financial and programme report for the Assembly.  He also endorsed the related proposal for developing a policy for public access to United Nations documentation and welcomed the proposals for consolidation of peacekeeping accounts.  He had learned from the ACABQ report that the proposal had been amended to ensure the linkage between assessments and Security Council mandates through quarterly assessments.  This modification improved the initial proposal of the Secretary-General.

The Union was committed to achieving results on the proposals before the end of the second resumed session, he said.  While aware of the Committee’s heavy workload, he recalled that most of the proposals had been discussed for months and a detailed question-and-answer session with the Secretariat had taken place in the latter part of the first resumed session.  With the necessary spirit of compromise, the Committee would be able to adhere to its schedule.

ROBERT HILL (Australia), speaking also on behalf of Canada and New Zealand (CANZ), said reform of the management of the United Nations would enable it to better achieve results for the Organization and its beneficiaries.  Tangible results on management reform during the remainder of the session were, therefore, essential.  While on some issues, CANZ would have appreciated more explicit ACABQ recommendations, the Advisory Committee had made an important contribution through its comments on accountability.  Delegates were reminded that accountability embraced multiple elements, that its deepening was a work in progress, that the present proposals of the Secretary-General would support that deepening, and that yet more work remained to be done.

He said the modernization of information technology and the adoption of IPSAS were basic building blocks of productive organization change and management reform.  It was imperative to have an appropriately qualified Chief Information Technology Officer, who would have to drive a process of major organizational change.  That function should be established and filled as soon as possible.  CANZ was also strongly committed to increasing the managerial discretion of the Secretary-General.  The Secretary-General’s proposals were more limited than his proposals last March.  He urged all to address the real issue at hand:  what was the best place for certain operational decisions to be taken?  He was puzzled by the Advisory Committee’s advice on those proposals, as it was at odds with positions the ACABQ had taken in the recent past on the subject.

With greater managerial discretion for the Secretary-General, CANZ recognized the need of apposite accountability, he said, and would welcome additional information.  While the two issues were complementary, they were also very complex.  Accountability should, however, not be used as a slogan that impeded doing what made managerial sense.  CANZ already had voiced support for international accounting standards.  The proposed consolidation of peacekeeping accounts might appear complicated, but the central issue was clear:  should peacekeeping financial obligations be met from a single cash pool?  There were good arguments for doing so, as part of a comprehensive package of reform.

He said CANZ supported reporting that presented relevant information to Member States and the public in a clearer, more accessible manner that was currently the case.  It was within the Secretary-General’s purview to pursue an annual report and CANZ encouraged him to do so.  He welcomed the initiative to enhance public access to United Nations documentation. 

MONA JUUL ( Norway) said that good management was to make effective use of resources to achieve one’s goals.  She agreed with the Secretary-General that a radical overhaul of the rules, structure, system and culture of the Secretariat was needed.  Almost a year had passed since the world leaders had initiated management reform measures.  While some progress had been made and the Organization was moving in the right direction, more had to be done to restore the United Nations credibility and enhance its effectiveness.  She encouraged the Secretary-General to continue to carry out reform measures, such as strengthening the leadership and managerial accountability within the Secretariat.  She was looking forward to an additional report on accountability later this month.

World leaders had requested recommendations on how to improve the conditions for the Secretary-General to carry out his responsibilities and how to improve the current rules policies in human resources and financial management to enable a more efficient and effective organization.  The first set of detailed proposals was before the Committee.  In addition to an accountability report, she was looking forward to receiving a report on procurement later this month.

On the management reform proposals in Adds.1-4, she said that her delegation found the proposals on financial and budgetary management to be of particularly strategic importance.  If implemented, they could make a real difference and facilitate better financial management practices in the Organization.  The Secretary-General pointed out that, in his first “Investing in the UN” report, its “primary financial message is that there has been massive under-investment in people, systems and information technology”.  She agreed that there was a gap between what Member States mandated the Organization to do and the collective resources made available to do the job.  It was necessary to keep that message in mind when discussing various proposals.  She hoped the Committee could reach agreement on such proposals as the establishment of a reserve fund, increase of the commitment authority and Working Capital Fund and consolidation of the peacekeeping accounts, as well as the adoption of the international accounting standards.

However, a prerequisite for sound management was that Member States paid their contributions in full and in time, she continued.  Therefore, her delegation would look favourably at the proposal on charging interest on Member States’ arrears.  Any measures to improve the cash situation as compensation for lack of payments should be coupled with measures to encourage payment of arrears.

Norway had, over the years, taken care in trying not to undermine the Secretary-General’s authority with detailed resolutions on budget and administrative issues.  The extent of the Secretary-General’s flexibility and, therefore, his ability to manage the Organization efficiently, was dependent not only on the tools Member States provided him to redeploy resources within a budget period, but also on the content of the budget resolutions and the budget level itself.  The tendency to go into detail and micro-manage was present even in current budget negotiations.   Norway had been promoting a stronger executive leadership for the United Nations for a long time and had advocated that the Member States gave the Secretary-General greater authority in budget implementation.

The United Nations was a multi-billion dollar enterprise.  “How can you manage this organization efficiently, when the full powers granted to the Chief Administrative Officer to redeploy resources are so narrow?” she asked.  All Member States recognized that there was a need for the Secretary-General to have limited discretion in budget implementation.  That was also agreement that there had to be clear accountability mechanisms on how that discretion would be exercised.  It was necessary to define the parameters.  She also agreed that a prerequisite for good management was an updated and integrated information and communication technology.  The Organization would benefit from having guidelines for public access to United Nations documentation.

It would take some time to change the culture and management practices of the United Nations, and the reform discussions would not end in June, she said.  For example, the human resource reform proposals expected in September were of great importance.  Other reform tracks were also important, and she anticipated constructive debates on the proposals that would come before the Assembly.  Aware of different views on various reform issues, her delegation would listen carefully to its partners and strive for solutions that all could stand behind.

KAREN PIERCE (United Kingdom), supporting the statement made on behalf of the European Union, said the proposals were important for the future of the United Nations and represented a vital part to the Summit follow-up.  Reform was not an end in itself, but a means to make the United Nations better able to discharge its role efficiently.  There was a need to work constructively and in a spirit of compromise.  The European Union was ready to move forward in that spirit.  One should move swiftly from formal introduction to detailed negotiations.  Working in that spirit, she thought that agreement by the end of the session was possible.

DIEGO SIMANCAS ( Mexico) said the reports were a good basis to guide the Committee’s work in the near future.  Some of the Secretary-General’s proposals could be implemented in a short period of time.  Nevertheless, other proposals were not clear enough and required more clarification.  He would ask for such clarifications during informals.

PETER WOESTE ( Germany) supported the position of the European Union and said that the proposals before the Committee were in line with the decisions of the World Summit and represented a good basis for successful reform efforts.  Member States should get involved as quickly as possible in open negotiations to achieve results, seeking to find solutions that would satisfy all delegations.

ALINE PEYRONNET (France) also supported the statement by the representative of Austria on behalf of the European Union and said that the propositions before the Committee represented a follow-up to the Summit decisions and represented a basis for management reform and efforts to modernize the United Nations.  She supported the efforts to improve the management of the United Nations and looked forward to open-minded and constructive negotiations on the matter.

STEFANIA ROSINI ( Italy) expressed support for the position of the European Union and said that her Government believed that, nowadays, the United Nations had to play a most important role.  After 60 years, many procedures and the structure of the Organization could be improved and updated to achieve the best results.  The proposals of the Secretary-General presented today were along those lines.  She welcomed the renewed atmosphere of constructiveness within the Committee and expressed hope for a successful conclusion of the negotiations.

KARL VAN DEN BOSSCHE ( Belgium) aligned himself with the position of the European Union and said that the proposals by the Secretary-General would serve as a basis for significant progress in the reform efforts.  It was important to strengthen the authority of the Secretary-General along with accountability
vis-à-vis the General Assembly.  He also stressed the importance of the climate of confidence among Member States, saying that now it was necessary to focus on the proposals before the Committee.  The Union stood ready to engage in an open and constructive debate on the matter.

IMTIAZ HUSSAIN ( Pakistan) agreed with the need for reform.  However, one should be mindful of the fact that such reforms could be successful only in an environment of trust.  That environment was impeded by current conditionalities.  He was surprised by the enormous desire for reform while the body was at the verge of financial collapse.  The solvency of the Organization should be first ensured.  Without that, the talk about reform was a “disconnect from reality”.  The first priority should be removing the conditionalities that had poisoned the atmosphere.

LOUIS F. REUTER, Assistant Secretary-General and Executive Director for the Capital Master Project, introducing the report on the Capital Master Plan (document A/60/874), said a three-week analysis for construction of a permanent office building on the North Lawn had been undertaken at no cost, which indicated that a cost advantage in the long term was to be accomplished with such a building.

However, given the state of the existing United Nations buildings and the urgent need for renovation, the Secretary-General recommended that the matter of a long-term real estate strategy be considered separately, and be made independently of the decision on the strategy on the Capital Master Plan.  “Let me point out to you that we do not need such a permanent office building on the North Lawn for a successful execution of the Capital Master Plan”, he said.

He said report A/60/550 of 11 November 2005 had recommended:  approval of strategy IV (phased approach) for implementation of the Capital Master Plan; approval of a project budget of $1.59 billion for strategy IV, excluding potential scope options; and approval of the funding plan for the Capital Master Plan based on a multi-year Member States direct assessment.  The funding approval was now becoming critical.

In order to prevent further cost escalation for the inevitable renovation of the existing buildings, he urged Member States to act on the recommendations without further delay, and leave consideration of the possibility of a permanent structure on the North Lawn in the context of a long-term real estate strategy, for a later date.  He said, “The time has come to take the ‘Plan’ out from ‘Capital Master Plan’ and to replace it by ‘Project’ -- ‘Capital Master Project’.”

Mr. SAHA, Chairman of the ACABQ, said it should be clearly understood that the current analysis was a completely separate matter from the question of swing space and had been considered independently of any other elements related to the Capital Master Plan.  It was essential that plans for the renovation of the building, which was urgently required, proceed without any further delay.

He said that since the report of the Secretary-General, in the opinion of the Advisory Committee, raised well founded concerns, the Committee had concluded that the conduct of a feasibility study on a permanent building on the North Lawn was not merited at the current stage.  The Advisory Committee, therefore, recommended approval of paragraphs 22a, b and c of the Secretary-General’s report which contained the Secretary-General’s proposals.

Mr. DROFENIK ( Austria), speaking on behalf of the European Union and associated States, said that the Capital Master Plan was a project of utmost importance, which had to be approached with a sense of urgency.  Erected in 1951, the United Nations Headquarters had outlived its natural life-span and was now a safety hazard for staff, delegates and visitors alike.  It wasted energy and was in constant need of repair.  A decision on the strategy was needed to avoid the postponement of the construction start, scheduled for next summer.  He, therefore, hoped that the Committee was now finally in a position to make a strategy decision.  The Union strongly supported the realization of strategy IV, which constituted the most sensible approach with the least obstacles.  He also invited countries that had not yet done so to express their support for that strategy.  It was in all Member States’ interest to avoid any further delays, not only because of related cost escalation, but because of the life-endangering conditions of the buildings.  The delegation must be guided by the firm principle “no further delays”.

He added that it was with regret that the Union had to say goodbye to Assistant Secretary-General Reuter who had played a key role in bringing the project forward.  He expressed appreciation for Mr. Reuter’s efforts and wished him all the best in his future endeavours.  He had confidence that the Secretariat would spare no effort to identify a suitable successor as a matter of priority.

MARK D. WALLACE ( United States) said the Committee should focus its attention during the resumed session on a decision on project strategy.  That decision was necessary to provide clear direction on the continuation of pre-construction work and on the use of the funds approved by the Assembly last month, of which $20 million had been spent.  He asked for clarification on what had been done with those funds, as well as what had been done under the approved commitment authority.

He agreed that strategy IV was the best way forward and looked forward to working with other Member States to reach a consensus agreement on strategy during the session.  The Secretary-General’s latest report also provided some interesting information regarding the long-term benefits of a consolidation building, he said.  The issue of such a building deserved careful consideration, but should be considered separately from the Assembly’s consideration of the Capital Mater Plan.  In that regard, he endorsed the ACABQ’s recommendations.

Mr. REUTER said he would be happy to address questions during informal consultations next week.

KATRINA NOWLAN, Chief of Service III of the Programme Planning and Budget Division, introduced the Secretary-General’s report on the revised estimates arising in respect of Security Council resolution 1660 (document A/60/844).

Mr. SAHA introduced a related ACABQ report (document A/60/854).

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For information media • not an official record