Sixty-eighth General Assembly

Fifth Committee

12^th Meeting (AM)

Fifth Committee Calls for Simpler Budget Process, Expressing

 

Concern over Proposed Cutbacks in 2014-2015 Cycle

 

Delegates in the Fifth Committee (Administrative and Budgetary) today again voiced their concerns about the methods, techniques and cutbacks the Secretariat had used to turn out a proposed $5.4 billion budget for the 2014-2015 budget cycle that begins with the new year.  United Nations Secretary-General Ban Ki-moon had formally unveiled the upcoming budget outline at Monday’s Committee meeting.  (See Press Release GA/AB/4080.)

While supporting the Secretariat’s move to eliminate nearly 400 posts as part of crucial budget reductions that would make the Organization sustainable over the long-term, the Russian Federation’s delegate said he was concerned that the cutbacks had largely affected the lower-level posts usually held by younger staff members.  Other delegates also were upset by the increase in upper-level management posts.

Other delegates pointed out the need to revamp the budget process to make it less unwieldy for Committee members and the Secretariat officials themselves.  Noting the thousands of pages of material before the Committee, Norway’s delegate backed a simpler budget process.  The current process was too complicated and created unnecessary work for the Secretariat and Member States, she said.  India’s representative said the widening gap between initial budget appropriations and revised estimates pointed to the infirmities of the budgetary process.  The expectation that additional expenditures would always be absorbed within the existing resources was ill-founded.

Responding to delegates’ concerns, Maria Eugenia Casar, Assistant Secretary-General and Controller of the Department of Management’s Office of Programme Planning, Budgets and Accounts, said Secretariat officials had closely followed the delegates’ comments and noted their concerns on many issues, including recosting, methodology and the presentation of budget figures.  The Secretariat was ready to work with Committee members and address their concerns during the next two months of negotiations.

Carlos Ruiz Massieu, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), said the Advisory Committee also was ready to work with all delegates to address their concerns.

The representatives of Pakistan and Cameroon also made statements today.

The Committee will reconvene at 10 a.m. on Thursday, 31 October, to discuss the Capital Master Plan and after-service health insurance, both part of the agenda item on the proposed programme budget biennium for 2014-2015.

Background

The Fifth Committee (Administrative and Budgetary) met this morning to conclude its discussion of the programme budget for the biennium 2014-2015.  (For background, see Press Release GA/AB/4080.)

Statements

SAHEBZADA A. KHAN (Pakistan) aligning himself with the “Group of 77” developing countries and China, expressed concern that the new budget proposal did not comply with the established criteria in preparation, presentation, format and allocation of financial resources.  He asked for further clarification as to why that was, given the absence of the necessary General Assembly approval.  Departure from the methodology had hampered examination of ACABQ (Advisory Committee on Administrative and Budgetary Questions) proposals.  The budget’s format and presentation was also altered without Assembly approval.  He hoped the Secretary-General would ensure programme narratives followed the approved pattern.  The Committee must address uncertainty and operational challenges caused by misinterpretations on recosting, he said, noting that a policy of zero nominal real growth in the resource level was followed, again without an Assembly decision.  That could harm mandate implementation.  The lack of flexibility undermined fiscal accountability and discipline.

He agreed with ACABQ that resource reduction in 73 areas and the abolishment of 261 posts would hinder the Organization’s mandate delivery, particularly given that young talent would be discouraged because lower grade levels were disproportionately affected by the cuts.  While posts had been abolished, their related functions had not, which gave the impression of cost-shifting from regular budget to extrabudgetary resources.  Extrabudgetary resources needed the same level of intergovernmental scrutiny and oversight as the regular budget to allow better monitoring and evaluation of programme delivery.  The Organization’s development and economic machinery must be strengthened.  Long-standing concerns over the Development Account had not been addressed, with the $200 million requirement never realized and no extra allocations coming its way, even when efficiencies and savings were achieved.  The current budget proposal would reduce its resources by 2.9 per cent.  More than half the cuts related to economic and social affairs or regional cooperation for development.  More information on that point was needed.

ASHWANI KUMAR (India), aligning himself with the Group of 77 and China, said that, although the budgetary allocations to the special political missions had increased steadily through the last decade, the regular budget had maintained a zero-growth rate in real terms for the last few bienniums.  Investments in information and communications technology, renovation and construction had also been substantial.  The widening gap between the initial appropriations and the revised estimates pointed to the infirmities of the budgetary process.  The expectation that additional expenditures would always be absorbed within the existing resources was ill-founded and they must not define the process of budgetary formulation.  The last few bienniums were heavily focused on reforms and renovations.  Much of the expenditures, therefore, went to Headquarters-based structures and processes.  Member States’ meagre resources should go to the poor and deprived and not for the creation of hardware and assets at Headquarters.  Programme delivery was the sole yardstick for the success of the budgetary process.  “Housekeeping expenses” must be moderated so that the Organization could discharge its primary responsibility.

DMITRY S. CHUMAKOV (Russia Federation) would continue to support the Organization’s efforts to achieve its goals of development, peace and security and other critical areas of cooperation.  Russian Federation also had been paying attention to United Nations reform in order to ensure the effectiveness of the decisions of intergovernmental bodies.  With the financial crisis facing all countries, the Organization must pursue a highly disciplined budget policy.  He regretted that data detailing the amount of resources for the biennium 2012-2013 had deviated from the Organization’s financial regulations and budget methodology.  This had made it difficult for the Committee to analyze the information.  Human resources made up 72 per cent of the United Nations regular budget.  It was necessary to pay attention to human resources and staff policy reform, which should enhance staff management.  He commended the Secretariat’s initiative to abolish 396 posts, but was concerned with the decline in the number of posts for younger staff and the increase in management posts.  For example, he questioned the need for the post for the Under-Secretary-General on Partnerships.

He expressed concern that the change management initiative had not yet produced any tangible results and the group’s report had not been produced.  The Organization was overloaded with reform processes.  The $5.4 billion budget proposed for the 2014-2015 budget cycle was in keeping with the approved budget outline.  But unfortunately, the final number did not take into account final cost requirements.  The Secretariat’s proposal for recosting could not be approved automatically.  He commended ACABQ’s work and agreed with its recommendations that posts that had been vacant for some time should be eliminated and expenses for travel and consultants should be curbed.

The Committee Chair then noted that Cuba’s representative was unable to deliver its statement because of an Assembly meeting taking place this morning.  Its statement would be uploaded later today on the website of the Permanent Mission of Cuba to the United Nations.

MICHEL TOMMO MONTHE (Cameroon), aligning himself with the Group of 77 and the African Group, asked the Secretary-General to return to the established methodology for the budget, which had stood the test of time and remained relevant for managing extra costs arising from new mandates and the thorny problem of discounting costs due to inflation and exchange rate fluctuations.  The outline was also just a preliminary estimate, not a budget ceiling, he stressed, noting that the contingency fund was useful for managing new expenditures.  There were distortions in the budget’s programmatic content, he said, expressing regret that some programmes had been included without intergovernmental backing, raising questions over compliance with relevant resolutions and regulations governing programme planning.  He shared ACABQ’s fears that insufficient time and resources had been devoted to the change management plan if tangible results were to be seen.  Various elements of the change management initiative were included in the budget proposal, potentially bypassing the Assembly’s recommendations on the matter.  Reductions to programmes would be disastrous, he said, noting that efficiency gains were not directed to the Development Account.  Post reductions would harm the organizational structure, creating a top-heavy pyramid.

ACABQ had made pertinent remarks in paragraphs 132-137 of its report on the $6 million requested for “continuity” activities, he said.  The estimated $14.1 billion in extrabudgetary resources for the 2014-2015 biennium could significantly impact the direction and implementation of the programme budget.  “If we are not careful, these resources could change the direction and execution of the programmatic content of the budget,” he said, suggesting the United Nations could be moving to “à la carte” management, rather than management in line with the Charter.  That favoured some countries over others in management structures, resources and programmes.  He agreed with ACABQ that the same rigour should apply to the use of extrabudgetary resources as applied to the regular budget.  He called for consistent application of existing guidelines across the Secretariat, with clear justification of any deviations, and he stressed that the adopted budget was the result of an Assembly process.  ACABQ recommendations, especially those in its summary paragraph, pointed delegations in the right direction for when they began negotiations on the proposed budget.

TINE MØRCH SMITH ( Norway) said the Assembly had reached an agreement on the budget level for the next biennium which represented a nominal and real decrease.  Norway lauded the Secretariat for presenting a budget proposal that was consistent with this budget level.  Norway agreed with the need for the Secretariat to search creatively for new and less costly ways to accomplish its mandates.  The economic situations faced by many Member States made these efforts very important.  The Committee should use the upcoming budget deliberations to make the Organization better equipped for its work by making strategic cuts, not across-the-board cuts.  Noting the thousands of pages of material before the Committee, she said the whole budget process must be simplified.  It was too complicated and created unnecessary work for the Secretariat and M ember States.  She welcomed ideas on how to make the budget process more effective.

Concluding Remarks

Responding to the delegates, MARIA EUGENIA CASAR, Assistant Secretary-General, Controller, Office of Programme Planning, Budgets and Accounts, Department of Management, said the Secretariat had been closely following the delegates’ comments and noted their concerns on many issues, including recosting, methodology and the presentation of budget figures.  Regarding their concern over the diversion from usual methodology to present the 2014-2015 budget outline, she said resolution 41/213 was used for the budget’s preparation.  The Secretariat had tried to improve the presentation of budget figures and provide more clarity by showing how past Assembly decisions had impacted budget decisions.

She acknowledged the need to review the recosting methodology.  The Secretariat was open to do so with the Committee’s mandate.  The Secretariat would be very happy to address this issue during the informal consultations.  “Recosting was a big, big issue,” she added.  The regular budget had been stable in real terms without the addition of special political missions.  In nominal terms, the budget’s growth had stemmed from recosting.  Regarding some delegates’ concerns that the Organization’s development pillar had been impacted by budget cuts more than other areas, she said the Secretariat had followed the Assembly resolution that asked for non-selective treatment when making the reductions of 2.9 per cent.  The Secretariat had given managers the flexibility to reduce their budgets in the best way that would still let their departments deliver their mandates.  She acknowledged the work ahead over the next two months and the upcoming talks on recosting, methodology and reduction in posts.

CARLOS RUIZ MASSIEU, Chair of the Advisory Committee on Administrative and Budgetary Questions, thanked all the delegations for their comments and said he would convey these comments to the Advisory Committee members.  He trusted that the Advisory Committee’s report would help the Assembly during its budget deliberations.  He would be available to answer any questions by any delegation.

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For information media • not an official record