Sixty-first General Assembly

Fifth Committee

31^st Meeting (AM)

FIFTH COMMITTEE APPROVES DRAFT TEXTS ON BOARD OF AUDITORS,

 

STATISTICAL REPORT ON UNITED NATIONS FINANCIAL SITUATION

 

Also Takes Up 2008-2009 Budget Outline, Financing for Lebanon Force

The Fifth Committee (Administrative and Budgetary) this morning recommended that the Assembly commend the Board of Auditors for the superior quality of its reports and accept the financial reports, audited financial statements and audit opinions of the Board on the organizations of the United Nations system.

The draft resolution on the Board of Auditors was one of the two texts approved without a vote today.  Further by the draft text, the Assembly would express its concern that the United Nations Office for Project Services (UNOPS) had been unable to submit its financial statements to the Board, thereby preventing it from expressing an opinion on them.  By the text, UNOPS would be requested to ensure that the situation is not repeated in the future.

The Assembly would also reiterate its request to the Secretary-General and executive heads of the Organization’s funds and programmes to ensure full implementation of the Board’s recommendations, as well as related recommendations of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), and to hold programme managers accountable for non-compliance.  The Secretary-General would be requested to provide a full explanation for the delays in the implementation, in particular of the recommendations not fully implemented after two or more years. In his future reports, the Secretary-General would be asked to indicate an expected time frame and priorities for the implementation of the recommendations, as well as the office holders to be held accountable.

The second text approved, as orally amended, was a draft decision, by the terms of which the Assembly would take note of the statistical report on the budgetary and financial situation of the organizations on the budgetary and financial situation of the United Nations system, prepared by the United Nations System Chief Executives Board for Coordination.  The ninth such report of its kind, it is the only system-wide source of statistics on the matter, grouped under such subject headings as regular resources, extra budgetary resources, assessed contributions and working capital funds.

Also this morning, as the Committee took up the preliminary outline of the Organization’s requirements for 2008-2009, several speakers expressed concern that -- at $4.14 billion -- it would represent an increase of $299 million, or 7.8 per cent, compared with existing provisions for 2006-2007.

Normally presented at the end of the “off-budget” year, a budget outline represents a preliminary indication of the resources that might be required in the coming biennium.  Once the outline is approved, the Secretary-General prepares the budget proposal on that basis.

Speaking on behalf of the European Union and associated States, Finland’s representative said that, by the time the decision would be taken on the 2008-2009 budget next year, Member States would be looking at proposals in the region of $4.37 billion.  Those figures did not include some major elements that would certainly have to be included by the time the actual budget proposal was at hand.  Collectively, the Union was the largest contributor to the United Nations budget and, thus, the increase of almost $1 billion in just four years was a challenge.

Representatives of the United States and Japan insisted that the overall goal for the regular budget should be zero nominal growth and stressed the importance of redeployment of resources and discontinuation of irrelevant, marginally effective and obsolete activities, as well as rigorous application of existing regulations.

However, the representative of South Africa, speaking on behalf of the “Group of 77” developing countries and China, expressed concern over the tendency to expect the Secretary-General to finance new activities and mandates from “within existing resources”.  There was only so much that could be done through instituting savings measures and moving funds from one activity to another, before the implementation of individual programmes, and ultimately the work of the Organization, suffered.

Also considered this morning was the Secretary-General’s request for commitment authority for the expansion and maintenance of the United Nations Interim Force in Lebanon (UNIFIL) in the amount of some $263.36 million, inclusive of $50 million previously authorized for the most immediate needs, and in addition to some $97.58 million already appropriated for the 2006-2007 financial period.  The request was presented pending submission of a full revised budget, following the decision of the Security Council, in its resolution 1701 earlier this year, to enhance the mandate of the force and increase its strength to a maximum of 15,000 troops.

The representative of Canada, who also spoke on behalf of Australia and New Zealand, was among the speakers who supported the Advisory Committee’s observation on the extensive use of commitment authority with assessment, saying that such requests should not replace fully detailed and justified budgets.  Several speakers also questioned the proposal to provide Lebanese Armed Forces with fuel and rations, saying that it was an unusual practice for the United Nations, and expressed their views on the Secretary-General’s request for 51 general temporary assistance positions at Headquarters to provide backstopping and support for the mission.

The United States’ representative commented on “a tendency to ask for more than was required and to place the budget on the Fifth Committee to sort out what was truly needed”.  For example, the request contained funding for quick-impact projects to aid the local population, which had proven to be a somewhat controversial issue in the Committee.  The representative of Brazil said though, that those comments seemed to disregard what had been adopted in resolution 60/266, which his delegation fully supported.  By that text, the Assembly welcomed the inclusion of quick-impact projects in peacekeeping budgets and recognized their important contribution towards successful implementation of peacekeeping mandates, while also stressing that the projects were an integral part of mission planning and development.

Also participating in the work of the Committee were representatives of New Zealand (also on behalf of Australia and Canada), Qatar, Argentina, United Republic of Tanzania and Nigeria (on behalf of the African Group). The documents before the Committee were introduced by United Nations Controller, Warren Sach, and the Chairman of ACABQ, Rajat Saha.  Those two officials also provided responses to comments and questions from the floor.

The Committee will hold its next meeting at a date to be announced.

Background

The Fifth Committee (Administrative and Budgetary) was expected to approve two drafts and take up consideration of the review of the efficiency of the administrative and financial functioning of the United Nations, as well as the financing of the United Nations Interim Force in Lebanon (UNIFIL).

On the review of the efficiency of the United Nations, the Committee had before it the Secretary-General’s report on the proposed programme budget outline for the biennium 2008-2009 (document A/61/576), which is normally submitted to the Assembly during off-budget years.  The document contains preliminary indicative estimates for the next biennium, which amount to some $4.14 billion.  In establishing a preliminary estimate, the approved level of appropriations and related commitments ($3.84 billion) was taken as a starting point, consisting of the initial appropriation of some $3.8 billion; additional appropriations of $31 million for the funding of special political missions and implementation of reform proposals; and subsequent commitments of $9.6 million authorized for the Human Rights Council and additional office accommodation in Geneva for the Office of the United Nations High Commissioner for Human Rights.

Regarding real growth compared to the 2006-2007 budget, the report states that the preliminary estimate of $3.48 billion, before inclusion of special political missions, represents an increase of $14.4 million, or 0.4 per cent, compared with approved appropriations and related provisions for the current biennium.  Once account is taken of the full inclusion of special political mission provisions, the total preliminary estimate of $4.14 billion would represent an increase of $299 million, or 7.8 per cent, compared with existing provisions for 2006-2007.

The report also recommends to adjust the level of the Contingency Fund for the next biennium by 0.6 per cent to a level of 1.35 per cent of the overall level of the proposed budget outline.

In its accompanying report (document A/61/615), the Advisory Committee on Administrative and Budgetary Questions (ACABQ) points out that, because the level of the Contingency Fund is set as a percentage of the overall level of resources, the amount of the fund increases with the size of the budget.  Experience has shown that the level of the Contingency Fund has almost never been exceeded.  Moreover, by Assembly resolution 60/283, the Secretary-General was authorized a budgetary discretion of $20 million for the biennia 2006-1007 and 2008-2009.   The Advisory Committee, therefore, recommends that the level of the Contingency Fund for the biennium 2008-2009 remain at 0.75 per cent, or $31 million.

As the Advisory Committee was informed, using the adjustments consequential to the first performance report for the biennium 2006-2007 (document A/61/593), the 2008-2009 budget outline figure of $4.14 billion would become $4.22 billion.  It, therefore, recommends that the Assembly adopt a preliminary estimate of $4.22 billion for the biennium 2008-2009 at revised 2006-2007 rates.

As for the financing of UNIFIL, the Committee had before it the Secretary-General’s report on financing of that mission (document A/61/588), which contains a request for authorization for the Secretary-General to enter into commitments for the expansion and maintenance of the Force for the period from 1 July 2006 to 31 March 2007 in the amount of some $263.36 million, inclusive of $50 million previously authorized by ACABQ for the most immediate needs, and in addition to some $97.58 million already appropriated for the 2006-2007 financial period.  The request is being presented pending submission of a full revised budget, following the decision of the Security Council, in its resolution 1701 earlier this year to enhance the mandate of UNIFIL and increase its strength to a maximum of 15,000 troops.

In his 17 August letter to the President of the General Assembly (document A/60/986), the Secretary-General informs the Assembly about his intention to submit a request for commitment authority pending the submission of a full budget for UNIFIL, and states that the appropriation of $97.58 million, approved by the Assembly for the period from 1 July 2006 to 30 June 2007 in resolution 60/278, shall be utilized flexibly, to quickly meet the immediate requirements of UNIFIL.

The Secretary-General also informs Member States of extraordinary measures he has “exceptionally authorized to enable the Secretariat to efficiently and effectively respond to” resolution 1701 (2006), which requires flexibility on behalf of the Secretariat.  Those measures include a waiver of the two-month notification process to all Member States for gratis personnel to allow troop-contributing countries to assist with the urgent need for military planners; reassignment of civilian personnel without advertisement of posts; relief from the present three-month limit on temporary deployment of civilian staff; and an immediate increase in the not-to-exceed level of existing contracts for fuel, rations, water and accommodation, for UNIFIL, as well as for the United Nations Peacekeeping Force in Cyprus (UNFICYP), which will provide initial forward logistics support to UNIFIL.  The letter also describes an increase in the procurement delegations of UNIFIL and UNFICYP for a period of six months to facilitate immediate development of the expanded Force.

The accompanying report of ACABQ (document A/61/616), points out that, once again, the Secretariat has resorted to commitment authority, which should constitute a short-term funding bridge mechanism pending the timely submission of fully detailed and justified budgets.  The presentation of de facto budgets in connection with requests for commitment authority should be avoided.  Also, as the Secretariat would avail itself of granted flexibility to retain staff on temporary duty beyond the 90-day period, the Committee encourages UNFIL to reduce the number of its staff on temporary duty to the extent possible.

Mindful of the significant expansion of UNIFIL and its impact on backstopping at Headquarters, the Advisory Committee recognizes that there does exist some immediate needs to meet the surge capacity requirements of the support account as a whole.  It, therefore, recommends commitment authority equivalent to half of the amount corresponding to the requested 51 general temporary assistance positions.  Since no United Nations Volunteers are included in the proposed staffing, the next budget should provide information on their possible use.  ACABQ also observes that the average grade level of national staff used for cost estimates appears quite high.

Noting that the provision of $87 million under “facilities and infrastructure” provides for construction, ACABQ cautions against extensive and long-term construction projects, as well as against entering into commitments to rent office space that might not be required in the future.  Moreover, the acquisition of information technology equipment for additional personnel at Headquarters should proceed with caution, pending a determination of exact requirements for backstopping to be provided to UNIFIL at Headquarters.

The Advisory Committee recommends that the Assembly authorize the Secretary-General to enter into commitments in the amount of $260.9 million, inclusive of the amount of $50 million previously authorized by the Committee, and in addition to the amount of $93.5 million already appropriated for the period.  Bearing in mind the cash balance remaining in the special account for UNIFIL as at 27 November, ACABQ also recommends that the Assembly approve assessment, at this stage, of 50 per cent of the approved commitment amount.  Care should be taken to avoid any implication that the provision of resources in response to the request for commitment authority in any way implies approval for the establishment of posts or the creation of new functions.

Introduction of Reports

WARREN SACH, United Nations Controller, introduced the Secretary-General’s report on the proposed programme budget outline for the biennium 2008-2009 (document A/61/576).  He said the report contained four elements: a preliminary estimate of resources; priorities reflecting general trends; real growth compared with previous budget; and the size of the Contingency Fund.  The budget outline was an estimate, and could only be general in nature.  In order to establish a preliminary estimate, the initial appropriation for 2006-2007 of $3.8 billion was increased by $31 million for funding of special political missions and the implementation of reform proposals, and $9.6 million for the Human Rights Council.  It was then adjusted by a number of factors, including the full provision for the continuation of the new posts approved for the current biennium.

The priorities reflecting trends of a broad sectoral nature were identical to those proposed for the strategic framework for the period 2008-2009, he said.  It was proposed that the programme budget for 2008-2009 should also reflect those priorities.  Real budget growth, before inclusion of special political missions, represented an increase of $14.4 million, or 0.4 per cent, compared with the approved appropriations and related provisions for the biennium 2006-2007.

He said that, regarding the Contingency Fund, recent experience showed more frequent occurrence of situations where potential charges substantially exceeded the balance available within the Contingency Fund.  Given new mandates arising during the current biennium, the Committee had appropriated significant amounts in excess of the available balance in the Contingency Fund, including $48 million for implementation of the 2005 World Summit Outcome.  He proposed that the level of the Contingency Fund be adjusted upwards by 0.6 per cent from 0.75 per cent of the overall level of resources, or $55.9 million, for the biennium 2008-2009.

He said the outline was presented at the same rates as the current 2006-2007 budget and did not contain any provision for inflation for 2008-2009 or for currency fluctuations.  Preliminary calculations indicated that inflationary adjustments of about $235 million would be required.  Based on that assumption, the total preliminary requirements for the biennium 2008-2009 adjusted for inflation, but not yet for exchange rates, would amount to $4.38 billion.

RAJAT SAHA, Chairman of ACABQ, introduced the related report of the Committee, contained in document A/61/615.

Statements

PAIVI VALKAMA ( Finland), speaking on behalf of the European Union and associated States, said that the budget outline gave the Committee the first opportunity to reflect on the proposed budget for the next biennium.  The Union remained committed to providing the Organization with the necessary resources to carry out its mandated activities.  By the time the decision would be taken on the 2008-2009 budget next year, Member States would be looking at proposals in the region of $4.37 billion.  Those figures did not include some major elements that would certainly have to be included by the time the actual budget proposal was at hand.  Collectively, the Union was the largest contributor to the United Nations budget and, thus, the increase of almost $1 billion in just four years was a challenge.

The Union recognized the increasing demands on the United Nations and the need to provide adequate funding to respond to them, she continued.  It also appreciated the efforts of the Secretary-General to exercise budgetary restraint in the proposal before the Committee, and encouraged further efforts to limit increases in the budget proposals.  It was vital that the Secretary-General, together with Member States, continued to identify ways to concentrate and redeploy resources in accordance with the priorities set by the Assembly.  She fully supported the Secretary-General’s comments in paragraph 9 of the budget outline to the effect that budget proposals would reflect the benefit of further reviews of possible obsolete activities, additional cost-effective measures and simplified procedures.

Based on the information at hand, the Union noted with interest the ACABQ recommendations, and looked forward to discussing the budget outline for 2008-2009 further in informals.  She looked forward to working with the Secretariat and her colleagues to ensure the optimal use of resources that were provided by Member States.

KAREN LOCK (South Africa), speaking on behalf of the “Group of 77” developing countries and China, said that, once adopted, the budget outline would form the basis of the budget preparations for the next biennium.  The estimates were indicative in nature, and the level of the proposed programme budget for the next biennium might be higher or lower than the preliminary estimates before the Committee.  The Assembly was considering a number of proposals and reports that could lead to increases in the preliminary estimates for 2008-2009.  The preliminary estimates for 2008-2009 amounted to some $4.1 billion, which, before the inclusion of special political missions, represented a marginal increase of 0.4 per cent compared with the approved appropriations for the current biennium.  Compared to the current provisions, activities related to political affairs, security and human rights were the only areas in the outline where significant growth was foreseen, with provisions for special political missions showing a significant increase compared to the previous biennia.

In accordance with resolution 41/213, the proposed budget outline should contain an indication of the priorities of the Organization, she said.  The Group of 77 attached great importance to the implementation of the development agenda, which had not seen any real growth in the regular budget provisions.  Resources approved by the Assembly should be commensurate with all mandated programmes and activities, in order to ensure their full implementation.

Turning to the Contingency Fund, she noted the proposal for an adjustment of 0.6 per cent in its level.  In 2003 and 2005, the Assembly had had to take extraordinary measures to avoid potential exhaustion of the Fund, even before the start of related biennia.  That untenable situation had to be addressed, and the Group supported the proposal.  Over the past few years, the Group had expressed its concern over the tendency to expect the Secretary-General to finance new activities and mandates from “within existing resources”.  There was only so much that could be done through instituting savings measures and moving funds from one activity to another, before the implementation of individual programmes and ultimately the work of the Organization suffered.  In addition, the Secretary-General had recently informed Member States that the calls on the Secretariat to absorb the costs of new mandates during the course of a biennium were undermining the funding mechanism envisaged when the Development Account was established in 1997.  Emphasizing that the role of the Fifth Committee in budgetary and administrative matters should be respected, she said that it was necessary to remind other Main Committees to desist from using the phrase “within existing resources” in their resolutions.

In conclusion, she expressed concern over the comparison drawn by ACABQ between the level of the Contingency Fund and the limited discretion granted to the Secretary-General in resolution 60/283, on an experimental basis.  The experiment should not be used for the purposes for which the Contingency Fund had been created.  That point was clearly emphasized in 60/283.  The Fund had been established to “accommodate additional expenditure derived from legislative mandates not provided for in the proposed programme budget” or from revised estimates.  The experiment on authorizing limited discretion to the Secretary-General was there to meet the evolving needs, and not to fund new mandates.

The Group was alarmed by the attempts to reinterpret the resolutions of the Assembly, either intentionally, or not, she said.  The Advisory Committee should be extremely cautious when it came to the agreements reached by Member States to ensure that it did not exceed its technical mandate.  The provisions of resolution 60/283 should be strictly adhered to by the Secretariat, and she cautioned against any reinterpretation of that text, either by the Secretariat, or the Advisory Committee, which might nullify the purpose of the experiment.

KHUSHALI SHAH ( United States) noted that the Secretary-General’s preliminary estimate of $4.14 billion included an increase of almost $300 million, not including items currently under discussion in the Assembly.  She was concerned by the continuing growth, even though the increase was due mainly to increasing costs in special political missions.  There should be further review of the relationship between special political missions and other United Nations entities operating in the same country and region, with a view to achieving greater synergies.  She questioned the proposal to raise the level of the Contingency Fund and supported the conclusion of ACABQ in that regard, as she stood ready to endorse all Advisory Committee recommendations.

She stressed that the overall goal for the regular budget should always be zero nominal growth, and strongly encouraged the Secretary-General to fully utilize Regulation 5.6 and Rule 105.6 of the regulations and rules governing programme planning, the programme aspects of the budget, monitoring and implementation and methods of evaluation.  It was important for the Organization to have an ongoing review of the outputs and activities, she said.  That review should be aimed at determining which outputs and activities were considered obsolete, of marginal usefulness or ineffective.  Such a review would help to ensure that the Organization’s scarce resources were being used efficiently and effectively and were targeted on high-priority programmes that produced results.

HITOSHI KOZAKI ( Japan) recalled that the Assembly had approved the 2006-2007 budget in the amount of some $3.8 billion.  His delegation could not but express its surprise at receiving a budget outline with a total requirement for 2008-2009, adjusted for inflation, but not yet for exchange rates, that would amount to some $4.4 billion.  It should be recalled that the budget for 2004-2005 had stood at $3.16 billion.  The new figure represented an increase over that figure of $1.2 billion, or 38 per cent.  He was not certain that the increase in the budget had brought about a corresponding increase in terms of impact and relevance of the Organization’s activities.  Rather, it came as a result of a failure to redeploy resources from low-priority activities.  A reduction in the programme budget should be pursued and achieved by redeployment of resources and discontinuation of irrelevant, marginally effective and obsolete activities, as well as rigorous application of existing regulations.  The Government of Japan maintained zero nominal growth as basic guidance in approaching the biennium budgets.

Even though the preliminary estimate for 2006-2007 was supposed to be “equivalent of zero real growth”, the actual requirements had grown significantly later on, bringing the actual budget to some $3.8 billion.  His delegation would like to emphasize that zero nominal growth, or zero real growth, was still a useful concept in enforcing efficiency through prioritization and redeployment.  It was high time to seriously consider that special political missions should be financed using the peacekeeping scale of assessment, given the fact that they contributed significantly to the rapid growth of the programme budget, and bearing in mind the special status and responsibility of the permanent members of the Security Council in the area of maintaining peace and security.  That meant that they should bear the corresponding financial responsibilities.

His delegation was highly alarmed by the proposal to increase the level of the Contingency Fund, he continued.  He was concerned that the Secretary-General had submitted a proposal that would touch the integral elements of the landmark resolution 41/213.  Bearing in mind the recent growth of the budget and the incremental nature of the current methodology, his proposal would surely lead to further increases in the expenditures of the Organization.  Japan could not accept that proposal.  The budget outline and the Contingency Fund had been established under resolution 41/213.  Those excellent mechanisms were intended to control budget growth through prioritization of activities within the resources available.  Recently, the Committee had seen numerous statements by the Secretary-General on programme budget implications in accordance with rule 153 of the rules of the procedure of the General Assembly.  He was concerned over the tendency of legislative bodies to create additional mandates without due regard for the important issue of prioritization.

His delegation recognized that the Secretariat would make its utmost effort to absorb new requirements within existing resources, rather than charging potential additional expenditures to the Contingency Fund, he continued.  He appreciated the Secretary-General’s intention to absorb additional requirements.  However, his delegation had its doubts as to whether such methods were employed by the Secretariat as a means to avoid the mechanism stipulated in paragraph 9, annex I of resolution 41/213 and paragraph 6, annex C of resolution 42/211.  Such methodology could lead to a situation in which insufficient effort would be made to absorb costs through redeployment of resources and prioritization of activities, and then additional resources might be requested later.  That might constitute a departure from proper budgetary procedures, which then led to a lack of budgetary discipline.  Moreover, he had his doubts about whether sufficient accountability would be exercised in such a process, given the fact that financial performance reports were usually submitted very late in the session.

His position was very clear -- all possible additional resource requirements should be absorbed within existing resources through redeployment and prioritization, he stressed.  If additional expenditures could not be absorbed, despite all the efforts of the Secretariat, those costs should be treated as charges against the Contingency Fund, in accordance with relevant resolutions.  His delegation was also aware that some of the estimated costs for 2008-2009 were included in statements issue under rule 153 of the Assembly’s rules of procedure.  Such information served the purpose of transparency.  However, that should in no way prejudge the outcome of the consideration of the 2008-2009 budget proposal.  His delegation would not assume that those estimates would be in addition to the current level of resource requirements.  Rather, he requested the Secretary-General to exercise his leadership to control the budget level for the next biennium, by redeployment of resources and discontinuation of obsolete, low-priority activities through rigorous application of Regulation 5.6, before he submitted his proposals to the Assembly.

PHILLIP TAULA ( New Zealand), also speaking on behalf o Australia and Canada (CANZ), said that the delegations he represented supported the concept of the budget outline as set out in resolution 41/213, and believed that it strengthened the budget process by increasing its predictability.  He acknowledged that the outline was a preliminary estimate.  It presented a relatively modest picture of growth, compared with the current biennium.  However, that picture masked some important factors.  First, growth was calculated on the basis of revised estimates for 2006-2007 and not from the level at the starting point of the biennium.  For example, the current outline figure was 25 per cent higher that the outline figure presented two years ago.  Second, taking into account inflation and other factors, which were not included in the outline calculation, the final budget figures for 2008-2009 were likely to be significantly higher than those presented in the outline.

He was concerned about the scale of growth in the budget over recent years.  The Organization had had to deal with important new challenges and responsibilities, but, as the demands on limited overall resources continued to grow, the importance of budget discipline and strengthening the results-based budgeting and management process had become even greater.  Member States, together with the Secretary-General, did their best to ensure that decisions about the financing of the Organization promoted overall effectiveness and efficiency.

As a final point, he wanted to carefully examine the Secretary-General’s request to increase the level of the Contingency Fund.  He was not convinced, at this stage, that such an increase was justified.

Mr. SAHA said there was no inconsistency in the Advisory Committee’s report.  The Advisory Committee had recommended that the level of the Contingency Fund remain at 0.75 per cent, or $31 million, based on the increase in the budget.  Also, past experience had shown that the level of the Fund had never been exceeded.  The Secretariat should, in that regard, provide the figures for the last eight biennia.  The only exception had been the implementation of the 2005 World Summit Outcome.  Reference had been made to resolution 60/283, but ACABQ was not reinterpreting the wishes of the Assembly.  The Advisory Committee had pointed out that the resolution stipulated that the authorization provided should not imply any changes in the use of the Contingency Fund.  Because of the two earlier mentioned factors, the level of the Contingency Fund should remain at 0.75 per cent.

Mr. SACH said that the methodology used for calculating the amounts in the report was the same as had been applied over the last 20 years.  Regarding statements of budget implications, the requirements should be systematically reviewed against the ability to absorb costs wherever possible.  If that was not possible, he had to ask for additional resources.  Regarding a comment on the late issuance of the performance report, he said it had been issued at the normal time, which was at the end of November or early December.  Regarding remarks on the special political missions, he said that, if Member States were interested in funding those missions outside the regular budget, the Secretariat would welcome it.

Turning to the matter of the Contingency Fund, he said the proposal for an increase had been driven by experience.  The amount paid from the Fund in the biennia 2000-2002 and 2003-2004 had virtually reached the amounts available.  The level of the Fund at the current biennium was $27.2 million, of which $26.4 million already had been committed, without taking into account the $48 million -- expenses related to the implementation of the 2005 World Summit Outcome -- that would normally have been charged to the Fund.  In order to retain the effectiveness of the instrument, a proposal had been made to apply 1.35 per cent, a more realistic level.  If that was not done, there would be excessive use beyond the Fund, with a consequent lack of predictability in budgeting.

Ms. LOCK (South Africa), speaking on behalf of the Group of 77, said that, reading paragraph 9 of the Advisory Committee’s report, one had to draw the conclusion that the Advisory Committee had used three elements in determining that the level of the Contingency Fund had to remain at 0.75 per cent: an increase in spending level; expenditures had not exceeded the level; and the reference to limited discretion for budget use.  The Chairman had just clarified that there were only two reasons.

She said she was concerned by any reference to resolution 60/283.  As there was absolutely no correlation, she did not understand why it had been included in the Advisory Committee’s report.  She could, therefore, not endorse paragraph 9 of the report.  She cautioned against the link that might be drawn between the recommendations and Assembly resolutions.

Mr. SAHA reiterated that ACABQ had recommended the level of the Fund to remain at 0.75 per cent for the next biennium.  That recommendation had been made for several reasons, including what South Africa’s representative had mentioned.  The Secretariat should provide information on the size and utilization of the Fund for the last several biennia.  As for the implementation of the World Summit Outcome, it was up to the Assembly to make a decision on that matter.

Action on Drafts

The Committee then turned to a draft resolution on the Board of Auditors reports (document A/C.5/61/L.12), by the terms of which the Assembly would accept the Board’s financial reports, audited financial statements and audit opinions on the organizations of the United Nations system and emphasize that the Board of Auditors shall be completely independent and solely responsible for the conduct of its audits.  The Assembly would commend the Board for the superior quality of its reports, in particular with respect to its comments on the management of resources and improving the presentation of financial statements.

Further by the draft, the Assembly would also decide that the Board’s reports on the two International Tribunals would be further considered under respective items relating to the Tribunals.  It would express its concern that the United Nations Office for Project Services (UNOPS) was unable to submit its financial statements to the Board of Auditors and, thereby, prevented the Board from expressing an opinion on the financial statements.  UNOPS would be requested to ensure that the situation was not repeated in the future.

On one of the aspects of the Board of Auditors reports -- replacing the Integrated Management Information System (IMIS) with a next-generation system -- the Secretary-General would be asked to take into account relevant experience of the funds and programmes of the United Nations in order to properly take into account the risks and challenges involved.  The Assembly would also welcome the information contained in the Board of Auditors report on the implementation of the International Public Sector Accounting Standards (IPSAS) and emphasize the importance of appropriate audit coverage on that issue in its future reports.  In that connection, the Secretary-General would be requested to include in his future report on the matter information on the decision on the accounting task force and its interaction with other entities that will be affected by the implementation of IPSAS, as well as the status of implementation and outstanding requirements.

Also by the text, the Assembly would reiterate its request to the Secretary-General and the executive heads of the funds and programmes of the United Nations to ensure full implementation of the Board’s recommendations, as well as related recommendations of ACABQ, in a prompt and timely manner, and to hold programme managers accountable for non-implementation of the recommendations.  The Secretary-General would also be requested to provide a full explanation for the delays in the implementation of the recommendations of the Board, in particular the recommendations not yet fully implemented that are two or more years old.  In his future reports, the Secretary-General would be asked to indicate an expected time frame for the implementation of the recommendations, as well as the priorities for their implementation and the office holders to be held accountable.

The Assembly would also emphasize that the forthcoming change of the Organization’s management should not hinder the implementation of the recommendations of the Board of Auditors.

The Committee approved the text without a vote.

Also before the Committee was a draft decision (document A/C.5/61/L.7), by the terms of which the Assembly would take note of the document transmitting the statistical report of the United Nations System Chief Executives Board for Coordination on the budgetary and financial situation of the organizations of the United Nations system.

The Committee’s Secretary, MOVSES ABELIAN, informed the Committee that a corrigendum to the draft would be reflected in the report of the Fifth Committee to the Assembly.

That text was also approved without a vote, as orally corrected.

UNIFIL

Mr. SACH introduced the Secretary-General’s reports on UNIFIL.

ACABQ’s report on the matter was introduced by Mr. SAHA.

Following the statement of the Chairman of ACABQ, Mr. SACH added that he had several concerns regarding the recommendations of the Advisory Committee, which related to the adequacy of budgetary provision at Headquarters and the cash-flow situation of the mission.  The cash flow was the more critical issue at the moment.  The ACABQ recommendation was to assess only half of the appropriation sought, but that was being suggested during a time when UNIFIL was already cash-poor and there were particular problems in reimbursing troops.  The mission was not up to date in that regard, even for the initial provisions of the budget, let alone the expanded budget.  “We are basically falling down on the ability to reimburse on a timely basis,” he said.  Anything less than the requested provision would exacerbate the situation.

Further, Headquarters capacity was sought for 55 general temporary assistance positions, while the Advisory Committee recommended only 30.  In connection with the deployment process, there were already 36 such people at Headquarters.  The demands of UNIFIL did not wait for all the processes to move forward.  It would not be useful to actually reduce the number of general temporary assistance persons at Headquarters at the current time.  In the absence of the full budget, the time lines were determined by the events on the ground and Security Council action.  It was impossible to come up with a fully justified budget at this point, but the needs were very real.

Mr. SAHA, noting Mr. Sach’s concern, requested that the figures just mentioned be given to ACABQ and the Fifth Committee, as those figures differed from earlier information.  The Advisory Committee had made clear that, should the need arise, the Secretary-General could request further assessment.

Statements

MIKAEL RAIVIO ( Finland), speaking on behalf of the European Union and associated States, said the Union fully supported UNIFIL and looked forward to the completion of its deployment early nest year.   The establishment of the strategic military cell dedicated to UNIFIL at Headquarters was an important step to facilitate fulfilment of UNIFIL’s mandate. After carefully considering the Secretary-General’s proposal and the ACABQ report, the Union had noted the differences between the two, and would like more detailed information on those issues.

Aware of the fact that the Committee was only considering a commitment authority, he said the Union looked forward to more detailed information in the full budget proposal.  One important element in that budget would be the requirements related to the Maritime Task Force.  He hoped that agreement between the United Nations and the countries contributing maritime resources would be possible before consideration of the budget.  The Union stood ready to grant all necessary financial means to the Secretary-General to implement all the provisions of resolution 1701 (2006).

OLIVIER POULIN (Canada), also speaking on behalf of Australia and New Zealand (CANZ), commended the Secretariat and the troop-contributing countries for the speedy deployment of UNIFIL’s “Blue Helmets” in southern Lebanon.  It demonstrated good progress in the capacity of the United Nations to deploy troops rapidly to hotspots around the world.

Continuing, he supported ACABQ’s observation on the extensive use of commitment authority with assessment.  While he understood the challenges facing the Secretariat, he trusted that it would not become standard practice.  He also supported the Advisory Committee’s caution on the presentation of a de facto budget.  Commitment authority requests containing a certain level of information should not replace fully detailed and justified budgets.

He further noted the proposal to provide the Lebanese Armed Forces with fuel and rations, saying that it was an unusual practice for the United Nations.  The countries he represented were looking forward to a clear explanation from the Secretariat on the rationale behind that proposal, and on any precedents.  He supported the establishment of positions at Headquarters for backstopping capacity.  In light of the current surge in peacekeeping, it was necessary to reinforce the Department of Peacekeeping Operations to ensure proper management of all the operations.  However, it should be done through the peacekeeping support account for 2006-2007 and reported to the Assembly in the context of the peacekeeping support account performance report.

As for the proposed establishment of a strategic military cell for UNIFIL in New York, he, like ACABQ, noted that it reflected a departure from established structure and practices.  While supporting the strengthening of the military function of the Department of Peacekeeping Operations and innovative approaches, such as the one at hand, he believed the proposal to establish the strategic military cell raised issues of an administrative nature, such as the structure, line of accountability and status of the staff of the cell.  The delegations he represented looked forward to hearing from the Secretariat on those points and to having a constructive discussion on the matter during informal consultations.  With regard to the ACABQ recommendations on a reduced assessment level, he added that he would be grateful for a practical assessment of its impact on the operations and cash situation of the mission.

KHALID AL-EBRIHIME ( Qatar) said that, following the war of Israel against Lebanon, the humanitarian situation had deteriorated.  The change of the UNIFIL mandate required by Security Council resolution 1701 (2006) demanded a revision of the budget.  The Advisory Committee had approved an increase of $50 million and had asked the Secretary-General to submit a complete budget.  The Secretary-General had then submitted a detailed report of the needs of UNIFIL, according to the provisions of resolution 1701.  He did not object to a temporary agreement on the figures in the report in order to enable UNIFIL to fulfil its new mandate, namely to prevent new hostilities and save lives.

DAVID TRAYSTMAN ( United States) said that, as his delegation had noted on 17 November, when the Committee was considering the request for commitment authority for the United Nations Integrated Mission in Timor Leste (UNMIT), it recognized that the surge in peacekeeping had placed a strain on the United Nations.  The United States understood the challenges faced by those at Headquarters and in the field, and would support them with what it believed was necessary to achieve their mandates.  His delegation was particularly aware of the burden placed on the Secretariat during the current difficult period, including during sometimes challenging negotiations.  But, it was precisely because of those new and ongoing challenges that his delegation expected stronger management, more efficient and effective implementation of mandates and greater accountability for action.  As the Committee continued to address the surge in peacekeeping operations, it must closely scrutinize the proposals before it to ensure that there would be the human and financial resources needed to meet current and future challenges.  The Secretariat should take extra care to ensure that requests for resources were fully justified.

As with UNMIT, his delegation must again express regret that the request before the Committee was not supported by the level of detail that would have been received in a full budget submission, he continued.  The full 2006-2007 budget of UNIFIL would be considered only in March next year. The Committee would then consider the July 2007 – June 2008 proposed budget in May, only two months later.  He agreed with the Advisory Committee that the routine use of commitment authority with assessment represented a departure from good budget practice and discipline. He called on the Secretariat to apply the budget discipline required for timely submission of proper peacekeeping budgets. With that in mind, there were indications in the current request that those involved in its preparation had not approached the task at hand with the required level of scrutiny.

He continued to see a tendency to ask for more than was required and to place the budget on the Fifth Committee to sort out what was truly needed to implement a mission’s mandate, he said.  For example, the request contained funding for quick-impact projects, which had proven to be a somewhat controversial issue in the Committee.  The Committee had agreed on a workable definition of such proposals as small-scale projects designed to be rapidly implemented to aid the local population.  Such projects were to be authorized and implemented during the first two years of a mission’s existence.  UNIFIL had been in existence since 1978.  Notwithstanding the increase in the Force’s area of operations, he saw no justification for including funding for quick-impact projects in the request for commitment authority.  If such a request was at all justified, it should be reviewed during the Committee’s consideration of the full budget, when the Committee would be able to judge whether such projects were justified in light of the purpose of the quick-impact projects and in the context of an examination of the programmes and projects carried out by United Nations agencies, funds and programmes in Lebanon, as well as other members of the United Nations country team.

There was the same lack of clarity and precision in the Secretariat’s request for general temporary assistance positions to reinforce the planning and backstopping of UNIFIL, he said.  In light of the fact that UNIFIL was close to full deployment, his delegation was not convinced of the need to request funding of all the proposed 51 general temporary assistance positions at Headquarters to address the UNIFIL’s short-term surge requirements.  He agreed with ACABQ’s recommendation that commitment authority equivalent to half of the amount corresponding to the 51 general temporary assistance positions should be approved.  The continuing need for backstopping at Headquarters should be fully justified in the proposed 2007-2008 support account budget.  While the United States was certainly sympathetic to the needs of UNIFIL and the Secretariat in administering the mission, it must be confident that resources were utilized wisely.  Starting up or expanding missions between budget cycles might place a strain on what was normally provided through the support account.  He encouraged the development of an institutionalized process for dealing with those needs on an interim and longer-term basis.

He also commented on the fact that the proposal before the Committee included $1.8 million for petrol, oil and lubricants to support the deployment of Lebanese Armed Forces in southern Lebanon.  While it was appropriate for UNIFIL to assist the Lebanese Armed Forces, he did not agree that the Committee was in a position to authorize the inclusion of funding for fuel support for Lebanon’s army.  He also noted that additional fuel and rations support had been requested.  As the Advisory Committee had indicated, the nature and extent of any support to be provided to the Lebanese Armed Forces should be clarified before the mission’s budget was prepared.  Material support to any country’s military armed forces should be obtained bilaterally or through other sources outside a peacekeeping operation’s budget.  His country was prepared to facilitate, if necessary, the Lebanese Armed Forces’ requests to regional capitals for that and other material support.  The best way to move forward would be for the Committee to remove the requested funding from the proposal to allow for further review and analysis.

HITOSHI KOZAKI ( Japan) said he shared ACABQ’s concern about budgetary decisions without proper justification, as well as excessive use of commitment authority with assessment -- a departure from proper budget practice and discipline -- and concurred that approval of commitment authority with assessment did not in any way imply approval of the structure and resource level of UNIFIL.  It also did not prejudge future consideration of the budget for UNIFIL.  He supported the Advisory Committee’s approach to making adjustments to the level of assessment.

He said issues related to Headquarters backstopping capacity should be discussed thoroughly in the context of the budget for the support account for the biennium 2007-2008.  In the meantime, the Secretariat should make use of vacant positions and existing general temporary assistance funding to meet the surge needed at the Headquarters for the mission.  He was “cautious” about the provision of $1.8 million for petrol, oil and lubricants, and did not understand why “support” was understood to mean a provision of fuels and other logistical and financial support.

He said his delegation would raise questions on the administrative aspects of the proposed strategic military cell, as well as the rational for other extraordinary measures authorized by the Secretary-General.  He was, furthermore, puzzled about the proposal for $500,000 for quick-impact projects, a clear departure from legislative agreements on the issue.

Mr. SAHA requested that additional information dated 28 November, 5 December and 13 December be provided to the Committee, including the number of staff on temporary duty assignment, status of recruitment and other issues.  That would facilitate the consideration of the matter during informal consultations.  The Secretariat should also provide the latest figures available, as ACABQ had based its recommendations on the information it had received at the time of its preparation of the report.

FERNANDO DE OLIVERIA SENA ( Brazil) said that his delegation was surprised by comments on quick-impact projects this morning.  They seemed to disregard what had been adopted in resolution 60/266, which his delegation fully supported.  By that text, the Assembly welcomed the inclusion of quick-impact projects in peacekeeping budgets and recognized their important contribution towards successful implementation of peacekeeping mandates.  It also stressed that quick-impact projects were an integral part of mission planning and development, and emphasized the need for a comprehensive policy, including those projects and bearing in mind the nature of each operation.  By the text, the Assembly also asked the Secretary-General to report on the matter at its sixty-second session, including the definition and duration of quick-impact projects, how they complemented the activities on the ground and how administrative costs could be minimized.

ALEJANDRO TORRES LIPORI ( Argentina), fully endorsing Brazil’s statement, said there was a conceptual difference regarding the effect and usefulness of quick-impact projects.  The issue was extremely important, especially in the context of the expansion of forces in Lebanon.  His delegation had considerable interest in maintaining resources for quick-impact projects.

JOHN J. NG’ONGOLO (United Republic of Tanzania) said his delegation fully supported UNIFIL and was concerned at the precarious financial situation of the mission.  The Secretary-General should be given adequate resources to fulfil the expanded mandate of the mission.

Mr. SACH said he would be happy to provide detailed information with regard to troop strength, as that figure had been changing rapidly. Compared to October, for instance, the number of troops had increased by 1,500 as of 13 November.  Compared to September, the troop strength had doubled.  He would also provide additional information on payment of contributions against assessments.  As of 15 November, $67 million in assessments was outstanding.

Organization of Work

At the conclusion of the meeting, the Committee Secretary said that the General Assembly had extended the work of the plenary until 21 December, setting the end of the work of the Fifth Committee on 19 December.  However, the Committee still anticipated submission of several reports, including those on special political missions, performance reports of the Tribunals, the first performance report for the biennium and revised estimates of the Human Rights Council and the Economic and Social Council.

NONYE UDO ( Nigeria), speaking on behalf of the African Group, recalled that the Group of 77 had raised the issue of the programme of work of the Committee.  In view of the grim outline just presented to the Committee, the Chairman should, in the near future, present his vision of how the Committee would be able to conclude its work, as it still had a number of very important outstanding issues.

Mr. KOZAKI ( Japan) wanted to know when the remaining reports would be submitted to the Committee, considering that its final date of work was 19 December.

The Secretary said that the Committee was expected to have several reports and statements of budget implications presented to it on Monday and Tuesday.

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For information media • not an official record