Sixty-first General Assembly

Fifth Committee

30^th Meeting (AM)

BUDGET COMMITTEE TAKES UP REPORTS ON UNITED NATIONS GOVERNANCE, OVERSIGHT REFORM;

ACCOUNTABILITY, INDEPENDENT AUDIT ADVISORY COMMITTEE AMONG ISSUES

As the Fifth Committee (Administrative and Budgetary) considered reports on governance and oversight reform in the United Nations this morning, speakers welcomed a proposal by the Advisory Committee on Administrative and Budgetary Questions for early decision on five issues recommended by the “Steering Committee on the Comprehensive Review of Governance and Oversight within the United Nations System”.

The five issues identified in the Advisory Committee’s report, introduced by its Chairman, Rajat Saha, related to strengthening results-based management; accountability; establishment of the Independent Audit Advisory Committee (IAAC); the operational independence of the Office of Internal Oversight Services (OIOS); and strengthening of the internal control framework and related application of risk management.

The report on which the Advisory Committee based its recommendations was prepared by PricewaterhouseCoopers (PwC) under the guidance of a Steering Committee of independent experts.  It includes recommendations on, among other things, the Joint Inspection Unit, the Office of Internal Oversight Services, results-based management and strengthening accountability of executive management.  The report was introduced by Warren Sach, Acting Under-Secretary-General for Management.

Inga-Britt Ahlenius, Under-Secretary-General, Office of Internal Oversight Services, introduced that body’s report and took issue with some of the Steering Committee’s proposals, in particular the recommendation to separate the investigation function from OIOS.  That would lead to a significant weakening of oversight in the United Nations, she said.  She also strongly disagreed with the Steering Committee that the Evaluation Section be relocated to the Department of Management.  She said that OIOS proposals to ensure the operational independence of the Office were the most critical, as the Department of Management, one of the Office’s main subjects for audit, currently played a major role in determining the OIOS budget.

Deborah Wynes, Chairperson, Joint Inspection Unit, introduced the Unit’s reports on oversight lacunae in the United Nations system and the Unit’s comments on the Steering Committee’s reports, saying that the Unit had taken a markedly different philosophical approach to oversight from that of the Steering Committee.  Oversight, the Unit believed, was a function of Member States and went substantially beyond internal audit.  Oversight was not a function of management alone, which itself was the subject of that oversight.  The Steering Committee had shown a lack of proper and timely consultations, a very limited understanding of how the United Nations system operated, and a lack of analysis, with conclusions based on face value statements rather than facts.

Commenting on the Joint Inspection Unit report, Ken Herman, Senior Adviser, Information Management Policy Coordination of the Secretariat of the United Nations Chief Executives Board for Coordination, speaking on behalf of that Board, said the report had contributed valuable information and thorough analysis to the current discussions on the oversight function in the United Nations system, which could and should be integrated within the context of additional frameworks currently under consideration by the Committee.

Speakers during the Committee’s debate expressed regret that the information on such an important subject had been introduced barely 10 days before the end of the Committee’s main session, making informed decisions on the subject impossible.   Switzerland’s representative said that, if there was no willingness to work on the basis of the ACABQ report or to follow its strategic guidance, the item should be deferred altogether and taken up as a priority at the first resumed session next year.

Several speakers commented on the desirability of implementing a decision of the General Assembly to establish the Independent Audit Advisory Committee.  The representative of the United States said, “We must act now to finalize the mandate, composition, selection process, and qualifications of experts for the IAAC, which is intended to assist Member States in discharging our oversight responsibilities,” he said.  He shared the Advisory Committee’s concerns regarding the body’s size and the advisory, rather than operational, character of its function, but supported prompt Assembly approval of revised terms of reference, so that it could begin its work as quickly as possible.

On strengthening the results-based approach and accountability, the representative of Finland, speaking on behalf of the European Union, said she was encouraged that a study would be prepared on how to update, improve and institutionalize results-based management and to align and integrate results—based management within the accountability framework of the United Nations.  The Assembly had to take action in order to move the necessary in-depth review forward.

Delegates agreed that the recommendation to transform the Fifth Committee into a small governing body was inappropriate, and that the discussion on the issue was closed.  South Africa’s representative, speaking on behalf of the “Group of 77” developing countries and China, said that to suggest that “a small but representative group of Member States” could replace the role of all Member States in carrying out the oversight responsibilities of the General Assembly was to deny every Member of the United Nations the role due to them and to attempt to amend the equality of Member States that was enshrined in the Charter.  The Group would not consider any proposal that was aimed at denying any Member State the right to pronounce on the administration of the Organization and participate in budgetary decisions.

The importance of the operational independence of the Office of Internal Oversight Services, including through its financing, and strengthening of the internal control framework and related application of risk management was also stressed by a number of speakers.

The representatives of Canada (also on behalf of New Zealand and Australia), Guyana (on behalf of the Rio Group), Japan, Pakistan, Russian Federation and Republic of Korea also spoke.

The Committee will meet again at 10 a.m. Wednesday, 13 December, to consider the budget outline for the biennium 2008-2009 and financing of the United Nations Interim Force in Lebanon.

Background

This morning, the Fifth Committee (Administrative and Budgetary) was expected to take up a series of reports on the Organization’s comprehensive governance and oversight review, which was undertaken at a request by the 2005 World Summit.

The Committee had before it the Secretary-General’s report (document A/60/883), which suggests that the Assembly review in detail the attached report of the Steering Committee for the Comprehensive Review of Governance and Oversight (document A/60/883/Add.1 and 2), prepared by PricewaterhouseCoopers (PwC) under the guidance of a Steering Committee of independent experts.  The document recommends that the Assembly endorse some of the Steering Committee’s recommendations, including those to ensure comprehensive implementation of results-based management, strengthen the accountability framework for senior management, implement a framework for enterprise-wide risk management, and assign responsibility for internal controls.

The Steering Committee’s suggestions concerning the Independent Audit Advisory Committee (IAAC) have already been reflected in the report entitled “Updated terms of reference for the Independent Audit Advisory Committee” (document A/60/846/Add.7) submitted to the Assembly.  In addition, the report contains modest adjustments to further refine the IAAC’s proposed terms of reference following additional consultations.

The Secretary-General does not comment on those governance and oversight recommendations, which fall strictly within the province of intergovernmental organs, including the recommendation that the Joint Inspection Unit be discontinued.  Also within the province of the intergovernmental organs is a proposed mechanism to eliminate inter-agency oversight gaps, which relates to the role and responsibilities of the Office of Internal Oversight Services (OIOS), the Board of Auditors and other oversight entities within the wider United Nations system.

Among the Steering Committee’s 23 recommendations regarding the OIOS, is the proposal to transfer the Office’s functions of investigations, inspections and evaluations to other offices of the Secretariat.  Following an internal review, the OIOS has also prepared its own proposals on the matter (document A/60/901).

The Steering Committee states that, while much has been done to improve budgetary practices, further effort is required to institutionalize results-based management; improve the use of information on results to make better decisions; steer efforts towards clearly defined goals; and focus on results to make better policy decisions and design better strategies within an overall accountability framework.  The recommendations also address the need to ensure active participation of Member States within the budgeting process.

The proposal to strengthen accountability of executive management is considered a priority.  It also envisions enhancement of management structures through the creation of a management committee, supported by a secretariat.  Terms of reference will be prepared for an in-depth expert review of the Secretariat’s accountability framework, which could also reflect the outcome of consideration by Member States of the Secretary-General’s report on accountability (document A/60/846/Add.6).

The Steering Committee’s other recommendations -– strictly within the province of intergovernmental organs -- refer to the need to strengthen the term limits and qualifications of expert committees and independence of their members; strengthen the procedures of the Fifth Committee (Administrative and Budgetary); and improve coordination of decisions on programmes and resource allocations.  Those proposals affect the framework and working practices of expert committees and such organs as the Committee for Programme and Coordination and the Advisory Committee on Administrative and Budgetary Questions (ACABQ).

Commenting on the Steering Committee’s report, the ACABQ, in a related document (document A/61/605), notes that the document is not well organized and is repetitive; the quality of its substance is uneven; and, in some cases, it lacks the empirical data to support its conclusions.  The ACABQ has identified five issues for early decisions, including those on:  strengthening the results-based approach; accountability; putting into effect the Independent Audit Advisory Committee; the operational independence of the Office of Internal Oversight Services; and strengthening of the internal control and application of risk management on a system-wide basis.

On the proposal to establish an executive management committee to support the Secretary-General, the Advisory Committee believes that the matter is entirely within the Secretary-General’s prerogative.  The Steering Committee also recommends the strengthening of the current accountability framework for executive management.  The ACABQ supports the undertaking of a review, which should include concrete proposals for specific sanctions to be applied in the case of under- or non-performance, as well as for recognition for outstanding performance.

Noting that results-based budgeting and management are mutually supporting and that further concrete measures are required to strengthen results-based budgeting at all levels, the Advisory Committee states that the Steering Committee has not been specific enough regarding concrete measures that could be taken to implement change.  The ACABQ agrees that a study should be undertaken, but that familiarity with the United Nations system would be essential.  In planning for the study, the Secretary-General should avail himself of the working group of the United Nations System Chief Executives Board for Coordination (CEB) on results-based management.

On minimum qualifications for the members of the Advisory Committee itself, the Committee notes that the proposals are heavily weighted towards financial experience.  Members, according to the rules, shall be selected on the basis of broad geographical representation, personal qualifications and experience.  The matter is within the purview of the Assembly.  As for remuneration, the Committee meets for more than nine months each year, unlike other expert committees.  The conditions of service of various expert committees may merit different approaches.  As for independence of the members of expert committees, the report points out that the Steering Committee has not addressed the autonomy of the secretariats of such entities.  As for strengthening the procedures of the Fifth Committee, the ACABQ points out that Assembly resolution 60/260 has reaffirmed its role, and sees no merit in considering the issue further.

On the recommendation on improving coordination of decisions on programmes and resource allocation, the Advisory Committee considers that the Steering Committee was not very clear or precise and that the issues relating to the recommendation and to improvements in the role of the Committee for Programme and Coordination should be taken up at the sixty-second session.  On the recommendation to strengthen effectiveness, transparency and independence of all committees, the Assembly may wish to transmit recommendations regarding the United Nations Development Programme (UNDP), United Nations Children’s Fund (UNICEF), Office of the United Nations High Commissioner for Refugees (UNHCR), and International Civil Aviation Organization (ICAO) to the bodies concerned.  The report recommends that the Assembly take note of the governance recommendation on establishing appropriate disclosure, ethics and whistle-blower policies.

Regarding establishing an Independent Audit Advisory Committee, the ACABQ states that it is for the Assembly itself to decide upon such issues as the mandate, composition, selection process and qualifications of experts of IAAC.  A smaller body would allow for greater ease of decision-making.  The IAAC should, therefore, be composed of 5 members, rather than 10.  As for expertise, a wide range of financial and audit-related experience is of the essence.  The Assembly should develop procedures to verify the qualifications of prospective members.  The autonomy of the secretariat of IAAC should be ensured.  The committee recommends that the Assembly request the Secretary-General to submit to it the revised terms of reference for IAAC.

The report further states that the Steering Committee does not explain its proposal to discontinue the Joint Inspection Unit with sufficient clarity.  The Assembly is the only competent body to deal with matters concerning the status of the Unit.  Regarding the review of the OIOS, the ACABQ says that many of the suggestions fall within the managerial competences of the Secretary-General and the Under-Secretary-General for Internal Oversight Services.  As for the Steering Committee’s recommendation that management acknowledge its responsibilities for risk tolerance, implementing controls and managing risks, the Advisory Committee agrees that this would clarify the responsibilities of management to assess risk and to decide and manage internal controls.

The Advisory Committee considers that the role of the Office as an internal oversight body is clear:  it is part of the Secretariat of, and it discharges the mandates conferred to it by, the Assembly under the authority of the Secretary-General.  The Office and management must cooperate, with management assuming responsibility in assessing and managing risk and the Office providing objective assurance and support to management in the process.  Further by the report, there is merit in strengthening the capacity for evaluation of the level of programme management.  As for internal evaluation, the ACABQ recalls that, in accordance with Assembly resolution 48/218 B, this function is carried out centrally by the OIOS.  The Advisory Committee underlines the need to ensure that the outcomes of the evaluation are taken fully into account by programme managers.

The ACABQ is of the opinion that the investigation function should be maintained in the OIOS, with such refinement as may be possible after the completion of the special review.  Regarding the question as to whom the OIOS should report, the Advisory Committee points out that, regardless of the internal administrative arrangements, the ultimate responsibility rests with the Secretary-General, under article 97 of the Charter.  Moreover, the operational independence of the Office requires that it report directly to the Secretary-General.  The Secretary-General should be requested to prepare a proposal, taking into consideration the above and other points, and draw upon the experience gained on cost-sharing mechanisms currently in place.

According to the Advisory Committee, the cost estimates in each section of the Steering Committee’s report have not gone through the normal budgetary formulation process carried out by the Secretariat.  Precise estimates will depend on such action as the Assembly may take with regard to the proposals before it.  At that time, the Secretary-General would prepare a budget implication statement, which should contain precise detail and justified budget estimates.

The Joint Inspection Unit report entitled “Oversight lacunae in the United Nations system”, transmitted to the General Assembly by the Secretary-General in document A/60/860, outlines areas where deficiencies exist.  It recommends, among other things, that legislative bodies of each United Nations organization establish an independent external oversight board with members elected by Member States to represent the governing bodies’ collective interests.

The report also offers recommendations to address deficiencies in external oversight, such as greater peer review and financial independence for the bodies, as well as employment-related restrictions and term-limits for the auditors.  In connection with deficiencies in internal oversight, the Joint Inspection Unit proposes eliminating overlapping authorities and responsibilities, reviewing the capacity and mandate of auditors, protecting whistle-blowers, preserving financial independence, ensuring a set of minimum standards for reporting on internal oversight, tracking of follow-up, guaranteeing peer review of oversight bodies, in-sourcing oversight functions for smaller bodies, establishing integrity and ethics standards and training, and collecting annual confidential financial disclosure for certain staff.  Finally, it recommends improving coordination of external and internal oversight mechanisms.

The report concludes that it is critical that Member States fully exercise their oversight responsibilities, or their domestic publics may come to believe that adequate safeguards are not in place, causing the loss of confidence and support for United Nations organizations.

An addendum (A/60/860/Add.1) to the report presents the reactions of members of the United Nations System Chief Executives Board for Coordination to the Joint Inspection Unit recommendations.  Generally, they commented that Joint Inspection Unit did not offer a clear description of how its standards were developed or what prior best-practice analysis supports them.  How the Unit’s proposed system would function in the United Nations diverse range of organizational structures and mandates was not understood.  The report also did not acknowledge the Institute of Internal Auditors, whose standards were adopted by the system in 2002, and are more likely to be accepted than any Joint Inspection Unit-suggested standards.  Additionally, they caution against interpreting the annex’s statistics without a complete understanding of the different operational models and business practices within the United Nations system.  The CEB agreed to several recommendations in their entirety, observed it had already begun to implement some others, and offered comments about details as responses to the rest of the proposals.

The comments of the Joint Inspection Unit on the Steering Committee’s report are contained in document A/60/1004.  In the view of the Unit, while the report provides important recommendations for strengthening governance and oversight, it has some serious shortcomings due to “a lack of proper and timely consultation, a limited understanding of how the United Nations system operates and in many cases a lack of analysis, basing conclusions on face-value statements rather than on ascertained facts”.

The Joint Inspection Unit report is based on the belief that oversight is ultimately the function of Member States; that it is a holistic and unitary function that goes substantially beyond internal audit; and that, therefore, the recommendations made therein must enfranchise the Member States to carry out that crucial function, the report states.  The Steering Committee report, on the other hand, emphasizes oversight as a function of management (the subject of oversight), with Member States having a more limited and more remote role and considers oversight as heavily weighted to the audit function.

Regarding the recommendation to discontinue the Joint Inspection Unit, the Unit notes that it is based on five paragraphs of the text, totalling less than one page in the 250-page document.  The text presented contains factual errors, misunderstandings and unsubstantiated statements.  At no point did the Steering Committee or consultants seek confirmation for the assertions they made, nor did they request source documents such as the standards and guidelines of the Unit or the Unit’s internal working procedures.

According to the report, discontinuation of the Joint Inspection Unit would deprive Member States of the only independent system-wide oversight body, reporting directly to legislative bodies, and would result in a structural gap in the oversight system.  The Joint Inspection Unit looks at system-wide themes and issues that cannot be looked at by any other existing oversight body.  It performs individual and system-wide management reviews and, by its statute, is independent from any single Member State or organization.  Even with a strengthened oversight system for all agencies, the Joint Inspection Unit would still be required, as no other independent entity could perform these functions.

On the OIOS, the Unit fails to understand how a proposed transfer of its functions could strengthen internal oversight, which consists of several distinct, but complementary functions.  Furthermore, the implementation of these recommendations would result in important issues of conflict of interest.

The Joint Inspection Unit concurs that internal oversight work plans should be based on risk assessment, a standard requirement under the International Standards for the Professional Practice of Internal Auditing.  However, risk assessment is based on a number of assumptions, each of which contains subjective elements and requires judgement calls.  The results of a risk assessment cannot, therefore, be automatically translated into resource requirements.  The Unit believes that a simple formula, determining a certain overhead rate to be applied to all activities, could facilitate allocation of funds for oversight and could serve as a baseline, which could be fine-tuned based on a comprehensive risk assessment.

While the Steering Committee and the Joint Inspection Unit agree on several of the measures recommended (e.g., establishment of an ethics function; financial disclosure requirements; establishment of an independent audit/oversight advisory body; term limits for the head of internal oversight), there are some important differences in the overall concept and the measures recommended.  To facilitate a comparison between the two options proposed, the Unit has highlighted the main differences in table format in the annex to its report.

The report of the OIOS on proposals for strengthening the Office (document A/60/901) is based on the principle that independence and transparency are prerequisites for effective oversight.  As opposed to the Steering Committee’s recommendations, the OIOS proposes retaining and strengthening its functions of internal audit, inspection, evaluation, monitoring and investigation, as stipulated in resolution 48/218, which established the Office.  The Office also emphasises that “OIOS is internal to the Organization but not internal to its management”.  The proposed change to the funding arrangements for OIOS will secure its financial independence and use risk assessments as a basis for determining the level of resources for internal audit, inspections and evaluations.  The setting of the Organization’s risk tolerance and the associated budget for oversight activities will be subject to the Assembly’s approval.

Under the proposed structure of the Office, existing internal audit functions will be consolidated into one division headed by a director.  Inspection and evaluation functions will be organized as a division.  Inspection will be reinforced with regard to its approach, methodology and number of staff.  The evaluation function will similarly be strengthened.  The monitoring function will continue to be undertaken by OIOS; however, the Office proposes that the responsibility for the preparation of the biennial reports of the Secretary-General on programme performance be transferred to the Department of Management.  The Office will be responsible for assessing the methodology, integrity and discipline of programme performance reporting.  It is also proposed that the function of internal management consulting be transferred to an appropriate office within the Secretariat.

The OIOS also recommends that its proposals be implemented by redeploying existing posts and using the funding allocated for general temporary assistance in lieu of established posts.  Additional non-post resources are proposed for implementing the risk assessment framework, eliminating the backlog of investigations cases and enhancing information technology tools and staff training.

In his report on accountability measures (document A/61/546), the Secretary-General insists that expeditious operationalization of the Independent Audit Advisory Committee, established by the Assembly in its resolution 60/248, is a critical element of the overall strengthening of oversight.  Other elements include the functioning of the OIOS, which has continued its own efforts to strengthen internal oversight, in particular in the areas of risk assessment methodology; investment in information and communication technology; monitoring of recommendations; and improving professional practices.  The Office is also taking the lead in strengthening programme evaluation, including such measures as establishing a programme and evaluation portal on iSeek, and training more than 300 staff members in results-based performance assessment.

According to the document, in order to ensure that major issues identified by the OIOS are dealt with in a timely manner, monthly meetings have been instituted between the Deputy Secretary-General and the Under-Secretary-General for Internal Oversight Services.  In addition, the management committee has taken on the responsibility of ensuring that recommendations of oversight bodies are effectively fed into the executive management process.

The Management Performance Board, which is responsible for monitoring and analysing the manner in which senior managers exercise all aspects of their authority to ensure that they are properly undertaking the responsibilities that have been entrusted to them, is now operational.  The document also addresses the outcome of the deliberations of the so-called Redesign Panel on the administration of justice within the United Nations and measures to respond to allegations of sexual exploitation and abuse.  The efforts to ensure ethical conduct within the Organization include the creation of the Ethics Office in January 2006, expansion of financial disclosure requirements and introduction of the policy on whistle-blower protection.  New training programmes on ethics have also been launched.

Also, a working group was established in 2005 to draw up a comprehensive plan of action to strengthen the capacity of the Organization to prevent fraudulent and corrupt acts by staff and third parties.  A short- and medium-term plan of action to deal with these issues was developed in 2005 and further refined in 2006, including validation by an independent expert specializing in fraud prevention and anti-corruption measures.  Other measures include the promulgation of a suppliers’ code of conduct and guidelines for acceptance of pro bono goods and services.  To enhance transparency, the Secretary-General outlined a new policy that will provide the public with clearer rules for accessing Secretariat documentation.  The Secretary-General also describes proposals aimed at improved reporting to the Assembly so as to provide the necessary information for Member States, hold the Secretary-General accountable for the performance of the Organization and enhance transparency.  A further step towards greater transparency was the adoption by the United Nations of the International Public Sector Accounting Standards.

The Committee also had before it the Secretary-General’s sixth detailed report (document A/60/846/Add.6) following his report “Investing in the United Nations:  for a stronger Organization worldwide”.  The report notes that, starting with the Charter, which sets out the purposes and principles of the United Nations, there are many instruments that guide the Organization’s legislative mandates, regulations and rules, policies and procedures, administrative issuances, guidelines, instructions, oversight and review bodies, and performance standards.  In addition, there are reporting requirements of Member States to address issues regarding the management of programmes, procurement and financial and human resources.  While such instruments provide legitimacy for the conduct of business, they also impose limitations on the way the Secretariat performs its duties.

Accountability should be viewed not only from the perspective of possible malfeasance, but also from the perspective of competencies for programme performance, the report adds.  Little attention has been given, within the Secretariat or by intergovernmental bodies, to holding the Secretariat accountable for the achievement of results.  In reviewing work programmes, the focus has been too much on the pre-implementation stage and, unless there are glaring errors, fraud or corruption, little time is given to determining whether or not results were achieved and, if not, why not.  While measures exist to deal with inappropriate behaviour, negligence and gross negligence, measures to determine the adequacy of results achieved and to hold staff accountable are insufficient.

While measures have been put in place to ensure accountability for programme management, follow-up action has not been comprehensive, the report states.  There is currently limited understanding of the consequences of underperformance, poor performance or non-performance, and there are currently no sanctions for the non-achievement of expected results.  A transparent and effective accountability system demands more than setting out or revising procedures, regulations and rules.  The Secretary-General suggests that the Assembly endorse two definitions of accountability, namely institutional and personal accountability.

Institutional accountability is defined as the Secretary-General’s responsibility to explain and justify to the Assembly and other relevant bodies, in a systematic framework and by an orderly process using transparent mechanisms, the Organization’s performance in using resources to achieve results mandated by Member States.  Personal accountability is the duty of an individual staff member to exercise defined responsibilities appropriately, with a clear understanding of the consequences, and to explain and justify to the official who conferred the authority the results achieved and the manner in which the authority has been exercised.

The Assembly may also wish to note that a sound legal framework for accountability exists in the United Nations consisting of, among other things, the Charter, the Financial Rules and Regulations, the Staff Regulations and Rules and the rules of procedure of the General Assembly, which specify the duties of the Secretary-General and of the Secretariat.  The Assembly may also note that the United Nations accountability framework has been strengthened in 2005 and 2006 through, among other things, the establishment of the Ethics Office and the provision of systematic mandatory ethics training for staff; strengthened financial disclosure requirements; the establishment of an Independent Audit Advisory Committee; and the establishment of the Management Performance Board to hold senior officials accountable for the conduct of their functions.

The report states that the Assembly may note that further enhancements to the United Nations accountability system may be anticipated in light of recommendations expected from the ongoing review of United Nations governance and oversight and of the internal justice system.  The Secretary-General would be requested to continue strengthening the effectiveness of the accountability system through improvements in results-based budgeting and management, ensuring that sanctions are applied through rigorous enforcement –- without exception and at all levels -– and ensuring that adequate incentives are in place to reward good performance.

The ACABQ report on “Investing in the United Nations:  for a stronger Organization worldwide”:  detailed report, Accountability (document A/60/909) recalls that a complete system of accountability requires further development, in accordance with all applicable Assembly resolutions, with particular attention to:  a clear definition of accountability in all areas; tools to implement accountability; an effective system for the administration of justice; and consistent regulations and rules.

The Advisory Committee, furthermore, trusts that forthcoming reports will link performance with both incentives and disincentives and emphasizes that particular attention should be paid to the accountability of senior managers.  Results-based budgeting and management require further development.  Existing instruments for informing Member States about performance are weak.  There is a need for further development of results-based management and the tools to relate resources to results.  The ACABQ urges the Secretary-General to complete the report on options for applying cost-accounting techniques drawing on best international practices, in accordance with resolution 59/275.

As for the Secretary-General’s recommendations in paragraph 42 of his report, the Advisory Committee recommends that the Assembly take note of the report and request the Secretary-General to further develop the definition of accountability.  The Assembly should also take note of recent enhancements to the accountability framework.  It should be pointed out, however, that while the Independent Audit Advisory Committee, the Management Performance Board and the Oversight Committee have been established, only the Management Performance Board has been constituted.

The Advisory Committee recommends, further, that the Assembly approve paragraph 42(d), by which it would note that further enhancements to the accountability system may be anticipated in light of recommendations expected from ongoing review of governance and oversight and of the internal justice system.  The Assembly should also approve paragraph 42(e) that requests the Secretary-General to continue strengthening the effectiveness of the accountability system through improvements in results-based budgeting and management, including through ensuring that sanctions in the accountability system are applied through rigorous enforcement without exception at all levels and ensuring that adequate incentives are in place to reward good performance.

The ACABQ, in another report (document A/60/903), reserves comment on the proposed terms of reference for the IAAC, pending the availability of the reports of oversight and governance.  In a related matter, the Advisory Committee refers to the internal oversight committee established by the Secretary-General in September 2005.  Upon enquiry, the Committee was informed that such an oversight committee had not yet been constituted.

While not yet in a position to make any pronouncements on the specific staffing proposals, the Advisory Committee does point out that, once the terms of reference have been approved and even before the members of the Audit Advisory Committee have taken up their duties, there might be a need for some preparatory work for the purpose of organizing support arrangements for the Committee, pending a decision by the Assembly on the number and grade levels of staff of the Audit Committee secretariat.  The ACABQ, therefore, recommends approval, at this stage, of general temporary assistance equivalent to six months at the P-5, P-3 and General Service levels.

The Advisory Committee further recommends that consideration of an estimated non-post requirement in the amount of $684,700 be deferred, pending Assembly decisions on the IAAC.  At the same time, identification of potential candidates by the Secretary-General, in consultation with Member States, would be a useful exercise with regard to preventing delays in putting the Audit Committee into operation, once the Assembly has taken relevant decisions.  The Advisory Committee does not believe, however, that the Secretary-General needs an additional appropriation to commence such work at this stage.

On a related matter, the Advisory Committee reiterates that ensuring the operational and budgetary independence of the Office of Internal Oversight Services is of the utmost importance and that the Assembly may wish, as an interim measure, to authorize the Office to submit its budget through the Advisory Committee.

Introduction of Reports

WARREN SACH, Acting Under-Secretary-General for Management, introduced the Secretary-General’s reports on the implementation of decisions contained in the 2005 World Summit Outcome for action by the Secretary-General:  comprehensive review of governance and oversight within the United Nations and its funds, programmes and specialized agencies (documents A/60/883 and Adds. 1-2); Investing in the United Nations:  for a stronger Organization worldwide, detailed report on accountability (document A/60/846/Add. 6); and on accountability measures (document A/61/546).

Through videoconference with Nairobi, INGA-BRITT AHLENIUS, Under-Secretary-General of the Office of Internal Oversight Services, introducing the OIOS report on proposals for strengthening the Office of Internal Oversight Services (document A/60/901), said that, in preparing her remarks, she had taken into account the report of the Independent Steering Committee.  The immediate regular budget revised estimate of those proposals for the 2006-2007 biennium had been submitted separately.

She said that, of the proposals contained in the report, ensuring the operational independence of the Office was the most critical.  One of the impediments to operational independence stemmed from the fact that the Department of Management, one of the primary subjects for audit by the Office, currently played a major role in determining the OIOS budget.  Furthermore, the funding received from the regular budget, peacekeeping support account and a number of other extrabudgetary sources of accounts limited the Office’s resources to those specific accounts, preventing the Office from moving resources from and between those accounts.  Those stipulations restricted ability of OIOS to pursue a risk-based approach to audit areas by priority from the risk that an area or audited entity might bear to the Organization.

She strongly disagreed with the Steering Committee recommendation to separate the investigation function from OIOS, as that would lead to a significant weakening of oversight in the United Nations.  She also strongly disagreed with the Steering Committee recommendation that the Evaluation Section be relocated to the Department of Management.  The Steering Committee’s report also did not provide an adequate analysis for strengthening the investigation function.  She wanted to comprehensively reassess the functions, structure and work processes of the OIOS Investigations Division.  Work was already well under way to improve the professionalism and quality of work.

The recommendation that the management consulting function be transferred to the Department of Management would be implemented, she said.  The OIOS proposed to redeploy 11 of the 27 unused general temporary assistance posts to other functions in OIOS.  The OIOS commitment to the Organization to undertake investigations of fraud and corruption had been more than adequately met with the establishment of the Procurement Task Force under her authority.  In addition to the redeployment of posts, she had also submitted proposals for building the skills and capacity of staff, including the technological capabilities of audit and investigations staff.

DEBORAH WYNES, Chairperson, Joint Inspection Unit, introduced the Unit’s reports on Oversight lacunae in the United Nations system (document A/60/860) and the Unit’s comments on the Steering Committee’s reports (document A/60/1004).  She said the report had been conceived at a time in which there were many press reports calling into question the efficiency of the operations of the United Nations system, the integrity of its management, and the effectiveness of the mechanisms created to oversee its operations.  The Unit’s report concluded that, while there was nothing intrinsically deficient with either the design or mandates of the overall system of oversight, important issues remained to be addressed, particularly with respect to the level and type of resources, working practices and independence of the system in place.  The philosophy behind the report was to strengthen the role of Member States, the “shareholders” of the United Nations.  The recommendations were designed to close the gaps that had been found in external and internal oversight.

She said the Unit had taken a markedly different philosophical approach to oversight from that of the Steering committee.  Oversight, the Unit believed, was a function of Member States; it was a holistic and unitary function that went substantially beyond internal audit.  The Unit did not see oversight as a function of management alone, which itself was the subject of that oversight.  The Unit had major concerns, going to the heart of the Steering Committee’s report itself.  Those concerns related to their lack of proper and timely consultations, their very limited understanding of how the United Nations system operated, and their lack of analysis, with conclusions based on face-value statements rather than facts.

KEN HERMAN, Senior Adviser on Information Management Policy Coordination of the Secretariat of the United Nations Chief Executives Board for Coordination, speaking on behalf of that Board, introduced the comments of the Secretary-General and of the Board on the Unit’s report (document A/60/860/Add.1), concluding that the Joint Inspection Unit report had contributed valuable information and thorough analysis to the current discussions on the oversight function in the United Nations system, which could and should be integrated within the context of additional frameworks currently under consideration by the Committee.

RAJAT SAHA, Chairman, Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced the Advisory Committee’s reports contained in documents A/61/605 and A/60/909.

Statements

DUMISANI KUMALO (South Africa), speaking on behalf of the “Group of 77” developing countries and China, said that the Group was on record as strongly supporting the strengthening of oversight and accountability in the Organization.  However, the Group wished to re-emphasize its principled position that to suggest that “a small but representative group of Member States” could replace the role of all Member States in carrying out the oversight responsibilities of the General Assembly was to deny every Member of the United Nations the role due to them and to attempt to amend the equality of Member States that was enshrined in the Charter.  Such attempts should be rejected categorically.  Consequently, it was regrettable that proposals on governance that had been rejected by the Assembly in May 2006 were again being placed before Member States.  Such an approach was counterproductive to the common efforts of Member States to strengthen governance, oversight and accountability in the United Nations.  The Group would not consider any proposal that was aimed at denying any Member State the right to pronounce on the administration of the Organization and participate in budgetary decisions.

Many of the proposals before the Committee today were not new and built on previous agreements reached in the Assembly, he continued.  Thus, consideration of the proposals on governance, accountability and oversight should be consistent with the initial intentions of the Assembly, as expressed in numerous resolutions.  Therefore, the Group urged all Member States to join in strongly reaffirming the equality of Member States, irrespective of the size of their financial contributions, and thereby rejecting any attempts to reintroduce divisive issues into the debate.  By removing that contentious issue from the outset, Member States would be able to embark on a constructive debate on governance, oversight and accountability matters.

The reports of the Advisory Committee, the Joint Inspection Unit and the OIOS provided a useful outline of the proposals that the Committee had to pronounce on, as well as those areas where the Secretariat, in consultation with oversight bodies, would have to further refine.  He supported a comprehensive approach to governance, oversight and accountability matters and believed that the proposals deserved careful consideration.  However, a pragmatic approach might be required at this stage and he looked forward to reaching a good outcome before the end of the session.

He recalled that the Committee had embarked on a debate regarding the importance of governance and accountability within the United Nations nearly four years ago and that the Assembly had pronounced itself on the matter in resolutions 57/278 and 60/254.  By the latter, the Assembly had indicated that the focus of the comprehensive review should be, among others, to clarify the roles and responsibilities of management with respect to supporting Member States and emphasized the intergovernmental nature of the Organization and its international character.  It was regrettable that the final product did not respond to the legislative framework set by the Assembly and pronounced on matters that fell outside if its scope; for example, those related to the functioning of intergovernmental bodies, such as the Fifth Committee and the Committee for Programme and Coordination.  He concurred with the findings of the Joint Inspection Unit and the ACABQ that the report lacked empirical data, engaged in generalities and lacked an understanding of the intergovernmental nature and international character of the United Nations.

The Group agreed with the ACABQ that it was up to the Assembly to pronounce itself on those recommendations that fell within the province of intergovernmental bodies.  The Assembly, in resolution 60/260, had already pronounced itself on proposals to limit participation of Member States in budgetary decisions by establishing “a small but representative body”.  It had also pronounced itself on proposals to change the role and mandate of the Committee for Programme and Coordination.  The Group supported the Advisory Committee’s recommendation to strengthen results-based budgeting and management, bearing in mind the provisions of resolution 55/231 and subsequent texts guiding the use of such budgeting.  He looked forward to considering the concrete measures, once the Secretariat had completed its study.  On the qualifications and terms and conditions of service of the members of expert bodies, the Assembly should consider concrete measures to improve the conditions of service of the ACABQ members, as well as improve the Secretarial support to expert and oversight bodies.

Turning to oversight, he said that the Group remained strongly supportive of the primary oversight role of the Assembly and supported the role and mandate of the Joint Inspection Unit, the OIOS and the Board of Auditors.  It was important to ensure that internal and external oversight structures of the United Nations remained independent and had unrestricted access to the Assembly.  He also supported efforts to ensure that oversight recommendations were fully implemented.

On the Independent Audit Advisory Committee, he noted that the Board of Auditors, Joint Inspection Unit and OIOS had highlighted several areas that required further consultations with the Secretariat.  He supported the recommendations of the ACABQ and looked forward to receiving the revised terms of reference at the first resumed session.  Those should clearly reflect the expert role of the Advisory Committee as an advisory body to the General Assembly, and clarify its interaction with the oversight bodies and the Secretariat, remaining mindful of the independent nature of existing oversight bodies.  The Assembly should elect the members of the Advisory Committee, who should reflect regional representation.

Regarding the OIOS, he said that the Assembly had, at its fifty-ninth session, reviewed and reaffirmed the mandate of the Office in performing monitoring, internal audit, inspection, evaluation and investigation.  The Group looked forward to receiving the outcome of the review that the OIOS intended to undertake to strengthen its capacity to perform those functions.  The Group also supported efforts to strengthen self-evaluation by programme managers and the central evaluation function of the Office.

Attaching great importance to strengthening the Organization’s accountability, the Assembly had repeatedly called upon the Secretariat to define accountability, including its mechanisms, and propose parameters and instruments for rigorous enforcement of accountability, without exception, at all levels.  The ACABQ had supported the request of the Secretary-General to undertake an in-depth review of the accountability framework of the Secretariat.  The Group would have preferred to take concrete action on the accountability framework at this session.  However, he expected that the review would take account of the outcome of the Assembly’s consideration of the reform of the system of the administration of justice, when proposing concrete sanctions to be applied in cases of under- and non-performance.  The review should also assess whether existing mechanisms were effective in such areas as financial and performance management and internal controls.

Continuing, he concurred with the ACABQ that the Secretary-General was responsible for establishing a risk management framework and for managing risk in the Organization.  He was also responsible for the maintenance of an effective internal control regime.  Responsibility for internal control activities should be clearly assigned and built into the revised accountability framework.  Managers should provide reasonable assurances that only appropriate transactions were authorized, executed and recorded and that errors were detected in a timely manner.  The Group expected that the Secretariat’s study of risk management and internal control procedures would include detailed information on training requirements, supporting structures and information system requirements.  Analysis was an essential step towards the development of a culture of accountability, and the Assembly should consider the findings when it considered the outcome of the proposed review of the accountability framework.

HEIDI SCHRODERUS-FOX ( Finland), speaking on behalf of the European Union and associated States, said that the world leaders had sent an unambiguous signal at the World Summit last year that substantial reform of the United Nations’ governance and oversight was needed.  It went without saying, therefore, that the Union attached great importance to that agenda item.  Most important, however, was getting the right result.  Member States had an opportunity to make a real difference on an area of reform that really mattered, to ensure that processes and structures were in place to get managers to take ownership of, and be held to account for, managing risks and delivering their objectives.  The opportunity must not be squandered.  Nor should the Committee allow itself to become distracted by such issues as the composition and working methods of the Committee for Programme and Coordination, the International Civil Service Commission or the ACABQ, not least since those were matters upon which the Assembly had already pronounced itself.

She supported the logical approach set out in the ACABQ’s report in which the initial focus would be on:  strengthening the results-based approach and accountability; putting into effect the Independent Audit Advisory Committee; enhancing the operational independence of the OIOS; and strengthening the internal control framework and related application of systemic risk management.  She also welcomed the distinction in the ACABQ report between those questions that fell to the General Assembly to resolve in its consideration of the reports, and those issues that the Secretary-General already had a clear mandate to take forward.  The Secretary-General should now further amend his proposed terms of reference for the Independent Audit Advisory Committee, and she encouraged him to do so at the earliest opportunity.  He should also put forward detailed proposals on ensuring adequate funding arrangements to ensure the independence of the OIOS.

On strengthening the results-based approach and accountability, she encouraged the Secretary-General to use the United Nations System Chief Executives Board for Coordination to prepare the ground for a study on how to update, improve and institutionalize the results-based management and to align and integrate results—based management within the accountability framework of the United Nations.  However, she recognized that action was necessary on the part of the Assembly before the necessary in-depth review could be taken forward.  Likewise, while it was clear that the Secretary-General was responsible for risk management and internal controls, the Assembly needed to take action in order for the requested study to proceed.  The Union would be keen to see such a study undertaken without delay and fully endorsed the recommendations of the ACABQ in that regard.

The list of priorities was not long, but the issue was complex, she continued.  To transform the governance and oversight in the Organization, Member States should take time to get it right, but in this session, at least, time was one thing they did not have, and that was a source of concern.  “Our instinct is that we should defer this issue to the first resumed session,” she said.  However, the Union was willing to work constructively with other delegations to see whether it was possible to base an action-oriented resolution on the report of the ACABQ, paving the way for a more detailed consideration of the issues in the first resumed session.

JOHN McNEE (Canada), also speaking on behalf of Australia and New Zealand (CANZ), said that the issues of governance and oversight gave practical form to the proper relationship between Member States and the Secretariat, provided the vehicle for effective decision-making and underpinned confidence in the integrity and quality of the work with the resources provided.  Although improvements in those areas neither started, nor ended, with the present review, the assessment commissioned by the world leaders offered an uncommon opportunity to survey the landscape comprehensively and to place the Organization on a sounder footing.

The Steering Committee’s report covered much ground, but it was not perfect, he said.  It nevertheless highlighted governance gaps and illuminated a wide range of issues concerning internal control, risk management, the functioning of the OIOS, its relationship to management and the role audit committees could play.  One need not agree with every recommendation to draw insight from the commentary.  “All or nothing does not work with a report of this scope; our challenge is selectively to extract from its strengths and to focus on what is most important,” he said.  The ACABQ had provided an important service in identifying five issues for early action, and he liked both the approach and the specific ACABQ menu.  He could not agree more with the importance attached to strengthening the results-based approach and the accountability framework, which were closely interrelated.

The Steering Committee pointed out that budgetary inputs were not sufficiently linked to outputs and that the Organization lacked robust tools for assessing its performance, he said.  That gap had long disturbed the delegations he represented, which was why they, and the General Assembly as a whole, had pressed the Secretary-General to explore the contribution cost accounting could make.  He hoped to receive information on the status of the long-overdue study.  Further, results-based budgeting, adopted six years ago, was at a risk of becoming a paper exercise, rather than as a management tool.  The results approach should be deepened, because results-based management provided the basis for greater transparency and more effective budgetary decision-making.  The Steering Committee was not very concrete on how to implement that idea, but both the Secretary-General and the ACABQ had suggested paths forward.

Continuing, he stressed the need to improve the accountability regime.  That included the requirement for both the will and the tools to hold staff, in particular the most senior staff, accountable for performance.  But it also embraced the broader need for the membership to have a clear picture of what was accomplished with their resources.  He wanted to move that agenda forward at this session.

Among the most important oversight issues, he mentioned the adequacy of the internal control regime and the arrangements for identifying and managing risk.  The Steering Committee highlighted the ambiguity in the division of responsibility between the OIOS and management for implementing internal controls.  That was clearly the responsibility of management.  He believed the Secretary-General had the responsibility to review the adequacy of internal controls.  Further, Member States should, at this session, ask him to make proposals to enable systematic assessment of risk on an organization-wide basis.  The second major theme could only be characterized as poor relationship between the OIOS and management, and that needed to be laid to rest.

The OIOS was internal; it was part of the Secretariat and worked under the authority of the Secretary-General.  Its responsibility was to support the management improvement efforts of the Secretary-General.  The OIOS would retain the ability to report to the General Assembly, and Member States would continue to have access to OIOS reports, but those were simply transparency measures, which should not interfere with the close partnership with executive management that an effective internal audit function required.  It was also time to implement the operational independence of the OIOS to enable it to respond to risk and avoid the need for the Office to negotiate resources with the objects of its oversight.  Also recommended by the Steering Committee was a major structural change, under which the OIOS would lose most functions, but audit.  He saw merit in keeping within the Office the elements where independence of thought and action was paramount, and CANZ thinking on the specifics mirrored that of the ACABQ.

Finally, on the Independent Audit Advisory Committee, he said that concerns recently expressed by the Board of Auditors, regrettably at the eleventh hour, made it imperative to resolve uncertainties in connection with putting that body into effect.  It might be best for the Secretary-General to submit revised terms of reference, even at this session, that would make clear the advisory role envisaged.  Like the ACABQ, he stressed the importance of a small, highly expert committee and the need for a mechanism to validate qualifications.

The breadth and complexity of the governance and oversight topic should not deter the Committee from acting where it could, he concluded.  The ACABQ had helped to sharpen the focus, and the delegations he represented were eager to work with all delegations in the remaining days of the session to take meaningful action on the pivotal issues.

GEORGE TALBOT (Guyana), speaking on behalf of the Rio Group, which associated itself with the statement made on behalf of the Group of 77, said the Rio Group supported the strengthening of results-based budgeting and management, awaiting specific proposals.  The Group endorsed the ACABQ recommendation regarding the terms of reference of the Independent Audit Advisory Committee, but stressed the need for equitable geographical representation.

He said the Group found “entirely unacceptable” the proposal to reduce the Fifth Committee to a “small and representative Group of States”.  The practice of multilateralism at the international level was the correlative of democracy at home.  The Group saw little merit in the continued discussion of the inherent ideas and believed that the proposal should no longer be pursued.  While fully supporting the strengthening of oversight in the Organization, the Rio Group recognized and maintained the primary oversight role performed by the Assembly.  Programme managers must implement recommendations of the oversight bodies with the utmost care and urgency.  The Assembly should be able to monitor and receive information on the status of the implementation of recommendations.

He said the proliferation of panels and external companies that were being hired to perform matters that were within the purview of established internal oversight bodies should be carefully considered.  The United Nations differed significantly from commercial enterprises, in that it was not established to be a profit-making entity, but an organization that promoted development, peace and security, and human rights.  The Group was committed to working to ensure that the Organization was suitably equipped to achieve those objectives by discharging its mandates as efficiently as possible.

JIRO KODERA ( Japan) said that the outcome of the Committee’s discussions would have long-term implications for the Organization.  Therefore, the issues of governance and oversight required a thorough and careful consideration.  Hasty decisions would not serve the best interest of Member States and the Organization.  His delegation shared the Advisory Committee’s view in identifying five issues for early decision, including:  strengthening the results-based approach; accountability; putting into effect the Independent Audit Advisory Committee; the operational independence of the OIOS; and strengthening the internal control framework and related application of risk management on a systematic and organization-wide basis.  He endorsed the view of the ACABQ, which identified several areas in which additional information from the Secretary-General would benefit the Committee’s deliberations in the near future.  The ACABQ report provided the Committee with insight and quite useful observations and suggestions.  It formed a good basis for consideration and should guide the deliberations in the Committee.

MARK WALLACE ( United States) said that, given the critical importance of the comprehensive review, he deeply regretted that the information provided had come so late in the current session.  It was imperative that consideration of the offered proposals be expedited in order to achieve at least some tangible results by the current session’s end.  The Steering Committee’s report represented an ambitious undertaking carried out by external experts and provided useful ideas for addressing the improvements envisioned by the 2005 World Summit.

He said the report of the ACABQ had identified several areas for early decision by the Fifth Committee, including one to put into effect the Independent Audit Advisory Committee.  “We must act now to finalize the mandate, composition, selection process, and qualifications of experts for the IAAC, which is intended to assist Member States in discharging our oversight responsibilities,” he said.  He shared the Advisory Committee’s concerns regarding the body’s size and the advisory, rather than operational, character of its function, but supported prompt Assembly approval of revised terms of reference so that it could begin its work as quickly as possible.

He also endorsed ACABQ’s recommendation for expedited Assembly consideration of proposals to ensure the operational independence of the OIOS, he said.  He also agreed with the ACABQ that stricter attention needed to be paid to monitoring progress on management’s implementation of recommendations made by all oversight bodies.  The Assembly should follow up on non-implemented recommendations by demanding more frequent updates and holding management accountable for changes not made.  Continued emphasis needed to be placed on the implementation of recommendations if reforms in oversight and governance were to be as effective as possible.

He said his country agreed with the ACABQ that any changes to the organization and structure of the OIOS should be considered in light of Assembly resolution 48/218 B, which had established OIOS and defined its responsibilities.  The core functions for which OIOS bore primary responsibility must be maintained, with the exception of the management consulting functions.  The OIOS, furthermore, must be ensured adequate funding arrangements.  “We share a collective responsibility to act promptly and decisively to fulfil the commitments made by Heads of State and Government to enhance the relevance, accountability and credibility of the United Nations system through the strengthening of our governance and oversight system,” he said in conclusion.

ANJA ZOBRIST RENTENAAR ( Switzerland) said the question was what could realistically be achieved in the few remaining days in the session, as an in-depth discussion was required, even for the five issues identified for early decision.  She saw no merit in considering the recommendation regarding the procedures of the Fifth Committee and thought the recommendation to discontinue the Joint Inspection Unit did not take into consideration the ongoing process of reform of that body.  A strategic focus was necessary, in order not to get bogged down in a detailed discussion on issues that did not need to be taken up at all.

She said the recommendations to strengthen the internal control regime and implement a systematic enterprise risk management framework were interrelated.  The concepts were complex and did not lend themselves to quick action.  She, therefore, agreed with the proposed study.  The recommendation to promptly implement the Independent Audit Advisory Committee was of crucial importance.  In that regard, she would welcome the formulation of a streamlined, revised version of the terms of reference, on the assumption that the Advisory Committee was first and foremost an advisory body with limited operational functions.  Clear and verifiable qualifications were needed for its members.  Although Member States had a role to play in the selection process, candidates should be screened beforehand.

A key question was how to guarantee the operational independence of the OIOS by making it financially independent from the Secretariat entities it audits, she said.  A new funding mechanism would have to remove OIOS from the discussion on the cost allocation and be practical to administer.  She trusted that a detailed proposal would be put forward at the first resumed session of the Committee.  The coordination and cooperation between oversight bodies of the United Nations system was of great importance.  There was a gap in the provision of oversight activities for inter-agency programmes, as the tsunami relief operation had shown.  An integrated risk management framework should be established and integrated audits and evaluations be carried out by one oversight entity on behalf of all participating entities.

She said the 10 days left before the end of the session were hardly enough, even if the review of governance and oversight was the only agenda item remaining.  If there was no willingness to work on the basis of the ACABQ report or to follow its strategic guidance, the item should be deferred altogether and taken up as a priority at the first resumed session.

IMTIAZ HUSSAIN ( Pakistan) endorsed the position of the Group of 77 and said that the United Nations was an intergovernmental and international organization with a unique governance structure, as defined in the Charter.  The authority and role of Member States and the Secretary-General as the chief administrative officer were defined in the Charter, as well.  The United Nations was essentially a public sector organization, but had a unique feature of the sovereign equality of its members, irrespective of their financial contribution.

The Steering Committee’s reports provided a reasonable basis for further discussions for the necessary reform of governance and oversight in the United Nations, defining the division of roles between Member States and management, and enhancing efficiency and accountability in the Organization.  The existing institutional arrangements for planning, evaluation and setting direction were not ideal, but with necessary and gradual reform they could be efficient and effective.  The Member States, through the Assembly and its Main Committees, and with expert advice from advisory committees, performed the role of both policy setting and the accountability of management.  The system did not need a major overhaul, as proposed in the reports, but “perhaps calibrated fine-tuning”.

The Steering Committee’s analysis of gaps was useful, he continued.  However, some of the Committee’s observations on the current practice of deliberations of the Assembly and on administrative and financial matters were somewhat politicized.  The Assembly had rejected the creation of a smaller and more representative group and committee for decision-making on administrative and budgetary aspects in its resolution 60/260, after acrimonious debate.  “We should avoid repeating the same mistake,” he said.

A number of the Steering Committee’s recommendations were useful, including those on greater executive management accountability; defining concrete criteria for membership in expert and advisory committees; a clear system of declaration and disclosures of financial interests; creation of in-house ethics functions; strengthening of results-based management; transparency and merit in the appointment of senior management; and improved coordination among the Committee on Programme and Coordination, ACABQ and the Fifth Committee.  The United Nations should adopt and expand results-based management.  The proposal to strengthen overall accountability of executive management was, indeed, welcome, and should be expeditiously implemented.

The recommendation on strengthening the term limits and qualifications of expert committees and ensuring independence of their members deserved careful consideration, he added.  Improvement in the working methods of expert committees was essential, but rebuilding their role and functions might not be practically possible.  Any major change that came at the cost of undermining the specific role of the advisory committees and the Fifth Committee would be difficult to implement.

He agreed that the United Nations management should set its own risk framework, risk tolerance and internal controls.  The OIOS should assist the Organization in evaluating those measures.  The Office had done an excellent job on its basic mandate, and limiting its role only as a management tool for the Secretary-General was not well founded. He did not agree with the Steering Committee that the OIOS budget should be presented to Member States, after a review by the Independent Audit Advisory Committee.  The mistrust between the management and the OIOS, as observed by the ACABQ, must be addressed.

Regarding the Joint Inspection Unit, he said that the Unit had provided useful insight into the management and efficiency of the United Nations system.  The Steering Committee, surprisingly, provided no definitive answers to fill the void that would be created with the discontinuation of the Unit in the context of external evaluation of the United Nations system.  The terms of reference identified by the Steering Committee for the Independent Audit Advisory Committee would need careful review.  He agreed with the ACABQ that its role should be advisory to the General Assembly.  The terms of reference proposed by the Secretary-General accorded it a significant operational role, which exceeded the scope of an advisory body.  The Independent Audit Advisory Committee of five members should be elected by the Member States and not be a nominated body.  Among other things, it also should not have discretion over the budget of the OIOS and the Joint Inspection Unit.  He supported the operationalization of the Independent Audit Advisory Committee after due deliberations on its terms of reference, and its role in the existing hierarchy of the Organization’s oversight.

In conclusion, he expressed regret that, with the Committee’s heavy agenda, comprehensive discussion on governance and oversight might not be possible.  However, a short resolution focused on the ACABQ recommendations could initiate the review process.  He agreed on the need for further reports on accountability, budget implementation, and revised terms of reference for the Independent Audit Advisory Committee, which could be considered at the resumed session.

ANDREY V. KOVALENKO ( Russian Federation) said that, unfortunately, the reports had been presented one week prior to the conclusion of the session, which was not helpful for taking on informed decision.  His country attached great importance to enhancing oversight and accountability.  However, one had to bear in mind that the recommendations of the Steering Committee had been made by PricewaterhouseCoopers consultants who were specialized in management practices of major corporations.  What they had proposed regarding the code of governance did not respond to the realities of the Organization.  For example, revision of Assembly decisions, in particular resolution 60/260, was not among the purposes of the study.  The recommendation to transform the Fifth Committee into a small governing body was inappropriate, because the issue was closed.

The procedure of appointment of Independent Audit Advisory Committee members was a serious matter, he said.  There was a need to ensure the independence of the members of that body from the Secretariat, namely the management it would audit.  The Secretary-General, therefore, should not be involved in the nomination of the auditors.  He was ready to discuss ways to address the shortcomings of the intergovernmental process of appointing Advisory Committee members.  Unfortunately, an appropriate recipe had not been proposed.  He had serious doubt about the recommendation that the Advisory Committee would make the Joint Inspection Unit useless, as the Unit performed different tasks in the United Nations system.  The role of the Advisory Committee should not be exaggerated.  The expert body was very important and its establishment should not be delayed, although it was not the central element of the reform.

The proposal for radical OIOS reform contradicted the original concept of the Office, he said.  OIOS had been created as more than just an internal audit office.  Its functions also included investigation, inspection and programme evaluation.  He noted, in that regard, that OIOS, in its report, was critical of the external consultant’s recommendations, in particular regarding the transfer of its investigative functions to the Office of Legal Affairs, which would create a situation of conflict of interest within the Secretariat.  When considering the Steering Committee’s recommendations, one needed a balanced, careful and critical approach.  His delegation stood ready for substantive discussions on the OIOS’ proposals on how to ensure the various aspects of its independence, as well as Joint Inspection Unit recommendations.  The ACABQ recommendations were a very good basis for the discussion by Member States of the whole range of issues related to reform of the oversight system.

SUL KYUNG-HOON ( Republic of Korea) said that governance and oversight were of utmost importance both for Member States and the United Nations.  However, the Committee had only limited time for a meaningful discussion of those issues.  He hoped that early decisions could be reached on at least some issues, as suggested by the ACABQ.  However, it was necessary to leave the possibility open for further discussing the issue during the first resumed session.

His delegation had long supported the implementation of results-based management, he continued.  Such an approach was necessary, if resources were to be used efficiently and effectively, and he hoped to see it further strengthened.  He agreed with the ACABQ that further concrete measures were required to strengthen results-based management at all levels.  If a results-based culture were to take root in the Secretariat, it would require a firm commitment, rigorous application and strong leadership from senior management.  A study should be undertaken to identify concrete measures and best practices to be implemented, making use of expertise throughout the system.

His delegation had also long advocated strengthened accountability for the executive management in the Secretariat, he continued.  In that regard, the Steering Committee’s recommendation that the Secretary-General establish an executive management committee merited serious consideration.  Real accountability would require a system of sanctions for underperformance.  From that perspective, he supported the recommendation for a strengthened accountability framework for executive management, which would include formal and transparent performance evaluation sanctions for not meeting performance targets.

Turning to oversight, he agreed that there was a serious organizational gap on risk management, without clear lines of responsibility.  A systematic risk management framework should be implemented expeditiously.  Likewise, stronger internal controls were needed to avoid mismanagement.  Those steps would contribute meaningfully to the development of culture of accountability and to strengthening administrative processes.  To serve as a cornerstone to oversight within the United Nations, his delegation would like to see prompt establishment of the Independent Audit Advisory Committee.  He agreed with the ACABQ that the Secretary-General should present revised terms of reference for the Advisory Committee at the first resumed session.  And finally, he would like to see the OIOS strengthened.  A number of the Steering Committee’s suggestions fell within the managerial competencies of the Secretariat.  He joined the ACABQ in urging the Secretary-General and the Under-Secretary-General for Internal Oversight Services to exercise their managerial competencies to ensure that the Office was able to carry out its responsibilities.

Concluding Remarks

Mr. SACH, in concluding remarks, welcomed the many statements received, the tone of which had been very positive despite the difficult subject matter.  He welcomed the recommendations of the ACABQ and agreed with its position that there was no merit in considering any further the governance recommendations regarding the role of the Fifth Committee.

He said a short focused resolution around a few key issues would provide basis for maintaining momentum on the issue.  At the first resumed session, the Secretariat would then submit reports, including on the revised terms of reference for the Independent Audit Advisory Committee.  The Secretariat was consulting with the OIOS regarding its budgetary independence, and conclusions of the consultations would also be submitted at the resumed session.  Adequate financing of the OIOS had also been the subject of a report (document A/61/610) that had not yet been introduced, as ACABQ first had to consider it.  Other reports asked for, which revolved around the accountability framework and risk management, would probably not be available before the resumed session, as outside expertise was required.

Mr. SAHA expressed appreciation for the positive words of support he had heard today.  He would convey the delegates’ remarks to all members of the Advisory Committee.

Ms. AHLENIUS said that she had listened to the discussion with great interest.  She noted strong support for increased accountability and strengthening of oversight within the United Nations, as well as strong support for the OIOS, strengthening its operational independence and establishing its financial independence from the Secretariat.

Ms. WYNES expressed appreciation for the comments in respect of the Joint Inspection Unit.

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