Sixty-eighth General Assembly

Fifth Committee

4^th Meeting (AM)

Adopting Consensus Text, Budget Committee Ensures Six Countries

in Arrears Retain General Assembly Voting Rights

 

Delegates Hail Upgraded Audit Functions of

Main Oversight Body, Stress Need for ‘Operational Independence’

The Fifth Committee (Administrative and Budgetary) today adopted a consensus draft resolution that allowed five countries to retain their voting rights despite failing to pay their annual contribution to the Organization.

By the terms of that draft, the Assembly would agree that Central African Republic, the Comoros, Guinea-Bissau, Sao Tome and Principe and Somalia had failed to pay enough to avoid application of Article 19 of the United Nations Charter — which prevents a Member State from voting in the General Assembly if its arrears equals or exceeds the amount due from the preceding two years — because of conditions beyond their control and would allow the five States to continue voting until the end of the Assembly’s sixty-eighth session.

Following action on that text, the Committee took up the reports on the activities of two of the United Nations’ oversight bodies:  the Office of Internal Oversight Services (OIOS), which was introduced by Carman Lapointe, Under-Secretary-General for Internal Oversight Services, and the Independent Audit Advisory Committee (IAAC), which was introduced by that body’s Chair, J. Christopher Mihm.

Delegates were in agreement over the importance of the two offices in improving the Organization’s effectiveness and efficiency and several delegates emphasized the extent to which OIOS had been responsible for enhancements to transparency, accountability and good governance within the United Nations.

“Its focus on the responsible use of resources and attention to waste, fraud and mismanagement add tremendous value in furthering integrity and accountability in the United Nations,” the United States’ representative said of OIOS, as he outlined several of the improvements.  They included upgrading of the audit function, better coordination between the Office’s various divisions and the restructuring of the investigations division to make it more responsive.

Nonetheless, he saw continued challenges, such as safeguarding the Office’s operational independence, which was crucial to effective and credible internal oversight along with its ability to exercise greater budget autonomy and to proactively pursue investigations as they were mandated.

Fiji’s representative, speaking on behalf of the “Group of 77” developing countries and China, said he was disappointed that the Office of the United Nations High Commissioner for Refugees (UNHCR) had not cooperated with OIOS’ efforts to conduct its “UNHCR’s programme evaluation”, as mandated by the Assembly.  He called on the Secretary-General to ensure progress and a positive outcome on implementation of UNHCR’s programme evaluation without further delay.

Like many delegations, he welcomed publication of the first “List of Key Oversight Terms” which was especially important in the context of the experimental publication of internal audit reports on the OIOS website.

The representative of the Philippines was one of several noting that OIOS’ report contained 81 critical recommendations, 36 of which were past due, and which carried total financial implications amounting to $7.9 million.

He went on to point out “significant observations” from IAAC on how OIOS could become more effective, including the need for timely investigation reports and the need for more scrutiny of mission-based procurement activities.  He looked forward to IAAC’s views on implementation of significant change and reform, such as the accountability system, the global field support strategy, the International Public Sector Accounting Standards and Umoja to ensure cost effectiveness and to deliver long-term financial and operational benefits to the Organization.

In other business, the Committee considered the 2012-2013 programme budget for the United Nations Office for Partnerships.  After Roland Rich, Officer-in-Charge of that Office, introduced the Secretary-General’s report on its activities, delegates noted the contribution that effective partnerships between the United Nations and the private sector could make towards achievement of the Millennium Development Goals.

The representative of the Russian Federation said he wished to see more detailed budgeting information pertaining to units connected to the Partnerships Office, including the United Nations Fund for International Partnerships and the United Nations Democracy Fund.  He also regretted that some Advisory Committee on Administrative and Budgetary Questions (ACABQ) reports were yet to be published in all official languages, despite having been completed in mid-August, stressing that delays complicated the Committee’s work.

The representative of Switzerland (also on behalf of Liechtenstein) also made a statement today.

The Committee will meet again at 10 a.m. on Wednesday, 9 October, to consider its agenda items on improving the financial situation of the United Nations and on programme planning.

Background

The Fifth Committee (Administrative and Budgetary) met this morning to take action on a draft resolution titled scale of assessments for the apportionment of the expenses of the United Nations:  requests under Article 19 of the Charter (document A/C.5/68/L.2) and to discuss the report of the Office of Internal Oversight Services (OIOS) on the activities of the Office of Internal Oversight Services for the period from 1 July 2012 to 30 June 2013 (documents A/68/337/Part 1 and Add. 1).  It also met to consider, under its agenda item on the review of the efficiency of the administrative and financial functioning of the United Nations, the report of the Independent Audit Advisory Committee (IAAC) for the activities of the Independent Audit Advisory Committee from 1 August 2012 to 31 July 2013 (document A/68/273), and under its agenda item on the programme budget for the biennium 2012-2013, the Secretary-General’s report on the United Nations Office for Partnerships (document A/68/186).

Action on Drafts

The Committee opened the meeting by approving the draft text on the scale of assessments for the apportionment of the United Nations expenses (document A/C.5/68/L.2) by consensus.

Report of the Activities of the Office of Internal Oversight Services (OIOS) and Review of the Efficiency of the Administrative and Financial Functioning of the United Nations

CARMAN LAPOINTE, Under-Secretary-General for Internal Oversight Services, introduced the OIOS report on its activities for the period from 1 July 2012 to 30 June 2013 (documents A/68/337 (Part 1) and Add. 1), saying OIOS had issued over 350 reports, including 11 to the General Assembly.  Those reports had included 917 recommendations, 81 of which were considered critical to the Organization.  Clients of OIOS had welcomed that categorization of recommendations as it allowed management to focus on the most significant deficiencies.  OIOS had developed procedures relating to publication of internal audit reports on the OIOS website.  Efforts were being made to ensure protection of highly confidential information and to shield any potential vulnerability from potential exploitation.  Reports were listed for 30 days prior to publication to allow Member States a chance to review reports prior to their becoming available to the public.  Public disclosure of internal audit reports improved transparency and was also resulting in higher quality reports.  To further improve communication of results, OIOS published on its website a “List of Key Oversight Terms” that it used in reports and activities.

Turning to vacancy rates, she said they remained close to 14 per cent, but were expected to improve once the transition period for implementing the reorganization of the peacekeeping investigations function was completed.  The Assembly’s support of the restructuring of peacekeeping-related investigations resources would help to improve efficiency and effectiveness of those activities, and to improve vacancy rates in that area, which had stood at 21 per cent.

J. CHRISTOPHER MIHM, Chairman, Independent Audit Advisory Committee (IAAC), introduced the IAAC’s sixth annual report (A/68/273), which covers its activities from 1 August 2012 to 31 July 2013.  IAAC continued to note the improvement in the rates of implementation of oversight body recommendations, a step in the right direction.  Yet to translate into accountability, these recommendations had to be of high quality while adding value and be implemented in a timely manner.  Regarding the Board of Auditors, he noted management’s actions to implement the Board’s recommendations.  Yet the overall 45 per cent implementation rate for 2010/2011 showed room for improvement.  At the Audit Advisory Committee’s request, Board officials said the drop in the number of recommendations did not reflect the Board’s opinion as to whether internal controls had improved.  Instead, it reflected the Board’s ongoing commitment to highlight more important and strategic recommendations.  OIOS expressed these same sentiments when it decreased the number of recommendations in its reports.

Turning to OIOS, IAAC had noted in last year’s report that OIOS had changed the way its recommendations were classified and followed up, he said.  Under the new arrangements, critical arrangements were followed up on a quarterly basis while important recommendations were followed up annually.  It noted an increasing trend of critical past due recommendations per quarter.  It was important to remember that expected implementations dates were set by management.  The Audit Advisory Committee recommended that the Management Committee address the root cause of this problem and ensure programme managers adhere to the target dates set for implementing oversight bodies’ recommendations.  With respect to the Joint Inspection Unit (JIU), IAAC was pleased to note the sustained improvement in management’s acceptance and implementation rates of the Unit’s recommendations.

Turning to the Organization’s push to integrate risk management into its overall operations, IAAC noted the progress made in this area by the Capital Master Plan, Department of Field Support and Office for the Coordination of Humanitarian Affairs, he said.  The Audit Advisory Committee was anticipating the Secretariat’s comprehensive review of the status of enterprise risk management implementation throughout the Secretariat.  In its prior report, IAAC had recommended that the Secretariat undertake this review, based on the 10 benchmarks identified by JIU, and submit a report to the Assembly.  This would set a baseline to measure progress and identify priority areas for attention.

Turning to the work plan and budget of OIOS for 2012—2013, IAAC had pointed out the high vacancy rates at OIOS in its previous reports and noted that the vacancy rate had declined from a high of 21.5 per cent in 2011, to 14 per cent as of 30 June 2013, he said.  This real improvement needed to be translated into a more complete execution of its work programme.  Plagued by high carry-over and long duration of its assignments, OIOS had to ensure congruence between budget execution and programme delivery.  With respect to OIOS’ investigation division, IAAC recalled its long—standing recommendation that the division weave a proactive approach into its investigation work.  “This is all the more important in light of the extremely low levels of procurement/vendor related investigations,” he said.  Turning to IAAC’s mandate on financial reporting, it was working with management on the Organization’s various reform initiatives, including the implementation of International Public Sector Accounting Standards (IPSAS).  As for UMOJA, IAAC recommended that the Secretariat continue to pinpoint and manage this high—risk project’s key risks, so it can achieve its objectives.

RATU SAINIVALATI SOVUI NAVOTI (Fiji), speaking on behalf of the “Group of 77” developing countries and China, stressed the importance of OIOS to ensuring that the United Nations could meet the challenges of the twenty-first century.  The Office had a critical role in strengthening internal controls, augmenting accountability mechanisms and improving organizational efficiency and effectiveness.  Taking note of OIOS’ recommendations, including those relating specifically to cutting costs and improving efficiency, he looked forward to studying changes in the way OIOS conducted its monitoring.  He welcomed initiatives aimed at strengthening the Office and was particularly interested in the impact of external reviews of investigations on the implementation of mandates related to strengthening investigation.  He also welcomed publication of the first “List of Key Oversight Terms”.

He emphasized the need for separation between internal and external oversight bodies as well as the importance of cooperation among such bodies.  He welcomed ongoing cooperation between OIOS and other United Nations oversight bodies, saying he had taken note of information related to oversight results as well as the internal risk trends and analysis.  He was disappointed that the Office of the United Nations High Commissioner for Refugees (UNHCR) had not cooperated with OIOS’ efforts to conduct its “UNHCR’s programme evaluation” as mandated by the Assembly and called on the Secretary-General to ensure progress and a positive outcome on implementation of UNHCR’s programme evaluation without further delay.  He appreciated the oversight coverage of the Capital Master Plan and the United Nations compensation commission, regretting that the report did not include information on oversight coverage for work conducted at the Economic Commission for Africa (ECA).

Turning to the annual report of the IAAC, he noted that that body had presented concrete recommendations to enhance the effectiveness, efficiency and impact of the audit activities and other oversight functions of the OIOS.  And he looked forward to a comprehensive discussion on a number of comments, observations and recommendations of the IAAC during informal consultations.

MATTHIAS DETTLING ( Switzerland), speaking also on behalf of Liechtenstein, welcomed the compilation and definition of key oversight terms, which was especially important in the context of the experimental publication of internal audit reports on the OIOS website.  Although pleased about stability in the vacancy rate despite reorganization of the peacekeeping investigations function, he was concerned that the number of past due critical recommendations was accumulating, calling on management to set more realistic timelines for implementation of recommendations and urging the Secretary-General to hold concerned departments and managers accountable.

Enterprise risk management remained plagued by “institutional inertia” and an overarching approach to assessing risks across the Organization was needed, he said, adding that there was also insufficient development of the internal audit risk trend analysis.  He saw untapped potential in enhancing cooperation between OIOS’ three divisions, hoping the current division of labour between the Under-Secretary-General and the Assistant Secretary-General would help to achieve that and welcoming participation of the Under-Secretary-General in the Management Committee’s meetings.  Looking ahead to the review of OIOS’ mandate, he said the recent externals review of its three branches would be useful to that process.  He expressed interest in the proposal to transfer to OIOS all the investigations functions currently in the Secretariat and also expected the Secretary-General to submit the terms of reference on strengthening investigations, which had been requested by the Assembly, in time for the review.

LIBRAN N. CABACTULAN (Philippines), aligning himself with the Group of 77 and China, stressed OIOS’ role in promoting accountability, transparency, efficiency and good governance and reaffirmed the importance of separation between internal and external oversight bodies.  He welcomed strengthening of OIOS, particularly on the conduct of the periodic external quality review, which helped Member States to make informed decisions when assessing requests and proposals from OIOS.  Noting that OIOS’ report contained 81 critical recommendations, he pointed to financial implications amounting to $7.9 million, stated that 36 critical recommendations were past due, and pointed to a high proportion of operational risks relating to audit recommendations on non-peacekeeping activities.  The report was unclear on whether the Inspection and Evaluation Division’s assessments covered the effectiveness and efficiencies of concerned departments or whether they addressed those entities’ capabilities to evaluate their own programmes and projects.

He pointed to “significant observations” from IAAC on how OIOS could become more effective, including the need for timely investigation reports and the need for more scrutiny of mission-based procurement activities.  He looked forward to IAAC’s views on implementation of significant change and reform such as the accountability system, the global field support strategy, IPSAS and Umoja to ensure cost effectiveness and to deliver long-term financial and operational benefits to the Organization.  He was also concerned that OIOS and the Office of the Capital Master Plan disagreed on the “partially satisfactory” rating for “governance”, “risk management” and “control” and looked forward to further discussions on that matter.

STEPHEN LIEBERMAN ( United States) noted IAAC’s recommendations to OIOS, particularly those relating to procurement, enterprise risk management and timeliness.  He commended IAAC’s efforts to raise awareness about the critical, long-standing recommendations that management still needed to carry out and encouraged it to keep providing Member States with unvarnished views on whether OIOS was performing to its full potential, as well as other issues.  OIOS’ role in bringing transparency, accountability and effectiveness to the United Nations was very important.  ”Its focus on the responsible use of resources and attention to waste, fraud and mismanagement add tremendous value in furthering integrity and accountability in the United Nations,” he said.  As part of the Assembly’s effort to provide OIOS with the resources and tools it needed to optimally fulfil its mandates, the Office now had an Assistant Secretary-General who was using his excellent management experience to help the Under-Secretary-General develop strategic goals and priorities.  The audit function had been enhanced, all OIOS divisions were boosting their coordination with each other, and the investigations division had been restructured to improve its response to needs in the field and more vigorously pursue cases of fraud or mismanagement.

He commended Under-Secretary-General Carman L. Lapointe for filling key vacancies and launching a pilot programme to publish internal audit reports on the OIOS website, as approved by the Assembly, and publishing the long-anticipated list of key oversight terms.  Yet any organization, particularly an oversight entity such as OIOS that was charged with auditing, investigating and inspecting functions, would have challenges as it pursued its goals.  The United States saw continued challenges in the Office’s investigative capacity and its willingness to proactively pursue investigations as they were mandated.  The external quality review, commissioned by OIOS, had led to 91 recommendations.  That was excessively high by any standard.  “We urge the division to implement those recommendations as quickly as possible,” he added.  Other challenges were safeguarding the Office’s operational independence, which was crucial to effective and credible internal oversight and its ability to exercise greater budget autonomy.

Committee Chairman JANNE TAALAS said the Bureau had taken an active role in determining the reasons for the late issuance of documents and had asked the Department for General Assembly and Conference Management to brief them on the status of documentation.  The information would be presented in a briefing.

2012—2013 Programme Budget for United Nations Office for Partnerships

ROLAND RICH, Officer-in-Charge, United Nations Office for Partnerships, introduced the Secretary-General’s report on the activities of that Office (document A/68/186), describing the Office’s partnership work as a gateway for public-private partnerships with the United Nations system in furtherance of the Millennium Development Goals.  He pointed to 534 projects supported by the United Nations Fund for International Partnerships and described the work of the United Nations Democracy Fund, which focused on building the voice of civil society, promoting human rights and ensuring participation of all groups in democratic processes.  He also explained the role of the Partnership Advisory services and outreach which had been initiated in 2006 in response to growing demand from within the United Nations system, Governments and non-State actors on how best to develop and implement public-private partnerships.  It had been the adviser and banker to the committee overseeing the establishment of a permanent memorial at Headquarters to the victims of the slave trade.

RATU SAINIVALATI SOVUI NAVOTI (Fiji), speaking on behalf of the Group of 77 and China, on the programme budget agenda item, noted that portions of the report on the United Nations Office for Partnership, such as information on the United Nations Fund for International Partnership, the United Nations Democracy Fund and the Partnership Advisory services and outreach related to the work of the Assembly’s Second and Third Committees.  It would enhance transparency and shape a more constructive dialogue if other appropriate Main Committees considered the report’s contents.  The Group agreed that effective partnerships between the United Nations and the private sector could help collective endeavours to reach the Millennium Development Goals and the post—2015 Development Agenda.  In his report, the Secretary-General had indicated that the relationship agreement between the Organization and the United Nations Foundation was being reviewed to ensure it reflected the evolving collaboration of the two entities.

In this regard, recognition of national leadership and ownership of development strategies should be a guiding principle of United Nations operational activities, he said.  Partnerships should be patterned on this principle and complement, rather than overtake or supersede, the national development activities meant to carry out national development strategies.  New initiatives, whether general or particularly within partnerships, should not weaken the regulatory role of State and intergovernmental bodies.  Partnerships should be governed and built around the purposes and principles of the Charter.

DMITRY S. CHUMAKOV ( Russian Federation) acknowledged the difficulty the Committee had in dealing with so many documents as it carried out its work.  The Russian Federation understood the pertinence of coordinating international efforts between Governments, the private sector and the United Nations in order to achieve the Millennium Development Goals.  During the informal discussions, the delegation would ask for more detailed information about budgeting issues concerning some of the units overseen by the United Nations Office for Partnerships.  These would include the United Nations Fund for International Partnerships and the United Nations Democracy Fund.  He conveyed his deep regret to Department of General Assembly and Conference Management because reports created by the Advisory Committee on Administrative and Budgetary Questions (ACABQ) still had not been published in the Organization’s official languages.  Yet, ACABQ had finished some reports in mid-August.  The delay would complicate the Committee’s work.

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For information media • not an official record