Budget Committee Considers Status of Economic Commission for Africa Headquarters Renovation, Progress Reports on United Nations Oversight, Governance
The Fifth Committee (Administrative and Budgetary) today examined the status of construction projects at the Economic Commission for Africa (ECA) as well as oversight issues across the United Nations system, including its exposure to fraud risks.
Discussions on the first topic centred mainly on the renovation of Africa Hall, the main conference area at the ECA complex in Addis Ababa, Ethiopia, and the proposed establishment of 18 security officer posts for the facility. (The Advisory Committee on Administrative and Budgetary Questions [ACABQ] recommended proceeding to stage three of the five-stage renovation of Africa Hall and approving 14 of the proposed posts.)
Bolivia’s delegate, speaking on behalf of the “Group of 77” developing countries and China, said that the renovation was still in the conceptual and design stages, and the Group was eager to hear reasons for the delay, and receive information on accountability and oversight measures to avoid further delays.
Ethiopia’s delegate welcomed the proposal for 18 more security officers and agreed with the Advisory Committee that the Assembly might wish to authorize the Secretary-General to proceed to the third stage of reconstruction, so development of the detailed design, construction drawings, and tender documentation could begin.
The Russian Federation’s delegate noted that the overhaul of Africa Hall would cost $57 million for the period 2015-2021, and urged the Secretary-General to provide his opinion on the establishment of a multi-year special account proposed by the Advisory Committee. He also said the proposed creation of 18 security officer posts must be carefully studied.
Deliberations then turned to issues of oversight and governance of the United Nations, including management of its “implementing partners” — third parties with whom United Nations system organizations signed agreements and allocated resources to implement their programmes and activities.
George Bartsiotas, Inspector of the Joint Inspection Unit (JIU), introducing his body’s report, said that despite the large volume of funds channelled through implementing partners, very few organizations had robust strategies, policies and procedures in place to select and manage those collaborators.
He also pointed out that the decentralized environment in which most United Nations system organizations operated was prone to fraud; the Board of Auditors and other oversight bodies had indicated that the fraud reported by United Nations agencies was unusually low. During the review, the JIU noticed a lack of fraud awareness among staff on the ground, and a lack of anti-fraud training, a finding that concerned him because most fraud cases were exposed through reports by knowledgeable and alert staff.
Briefing on the work of Board of Auditors during the biennium 2012-2013, Amyas Morse (United Kingdom), that body’s Chair, said that management was coming under increasing pressure to demonstrate that Member States’ investment in business transformation was translated into tangible and beneficial change, such as new ways of working, reduced costs, improved productivity, and more cost-effective delivery.
Most importantly, he said, constrained resources must reach those who desperately needed them, instead of being locked into administrative overhead. To strengthen its oversight and governance, the successful implementation of Umoja, the Organization’s enterprise resource planning initiative, was vital. A realistic plan that took into account uncertainty and risk was necessary to avoid having to continue requesting more funding and further extensions from the General Assembly.
The Organization’s regular budget production process, he continued, could be shortened and should reflect future costs, not past ones. The United Nations also needed a better understanding of its exposure to fraud risks, in particular external ones, across all of its activities, including peacekeeping, global procurement, and humanitarian affairs. There was a need to develop an integrated counter-fraud strategy, along with clear protocols for staff to follow when fraud cases emerged.
Kenneth Herman, Senior Adviser on Information Management Policy Coordination at the United Nations System Chief Executives Board for Coordination (CEB), introduced the note transmitting comments of the Secretary-General and the CEB on the JIU’s report.
Collen V. Kelapile, Chief of Staff at ECA, introduced the Secretary-General’s report on progress in the construction of additional office facilities there.
Carlos G. Ruiz Massieu, ACABQ Chair, introduced his body’s related report.
Also speaking today were the representatives of Togo (on behalf of the African Group), United Republic of Tanzania, and the European Union.
The Fifth Committee will meet again at 10 a.m., 16 October, to hold a general debate on improving the financial situation of the United Nations.
Financial reports and audited statements and reports of Board of Auditors
AMYAS MORSE (United Kingdom), Chair of United Nations Board of Auditors and Comptroller and Auditor General, briefed the Fifth Committee (Administrative and Budgetary) on his Board’s work during the biennium 2012-2013. He noted that the Organization’s entities generally had a relatively stable financial position; management, however, faced the challenge of fulfilling the entities’ mandates at a time of unprecedented humanitarian and other crises, amid ongoing fiscal constraint, heightened public scrutiny of spending and other changing environments.
In that context, he continued, business transformation and improvement was vital because United Nations entities could not assume that the same or increased levels of funding would always be available or predictable. “Resources are finite but mandates are increasing,” he said, noting that the Secretary-General recognized that improved efficiency and cost-effectiveness were “no longer optional”. The Board acknowledged significant and ongoing improvements in financial management and reporting linked to the implementation of the International Public Sector Accounting Standards (IPSAS). However, it had also seen management coming under increasing pressure to demonstrate that Member States’ investment in business transformation was translated into tangible and beneficial change, such as new way of working, reduced costs, improved productivity, and more cost-effective delivery.
Most importantly, he said, it was vital that increasingly constrained resources got to those who desperately needed them, and they were not locked into administrative overhead, entrenched methods of operating or inflexible structures. The Board’s current reports carried a strong theme on the need for improved management of implementing partners in global operations, and the need for robust selection and monitoring processes.
The Board considered that the successful implementation of Umoja, the Organization’s enterprise resource planning initiative, was vital, he said. To get value from future spend and arrive at a positive position, management must invest much more in business readiness prior to Umoja’s future roll-out. Also, it must plan realistically by providing Member States with the best estimate of what the implementation of full functionality would entail. The plans should include time and cost provisions for uncertainty and risk, to avoid having to continue requesting more funding and further extensions from the General Assembly. The Administration must clarify the accountability of each Under-Secretary-General and head of business unit for the changes that needed to occur.
The regular budget production process could be streamlined as it took too long and was not built on a good understanding of the real costs of delivering mandates, he argued. Due to a lack of that understanding by management, the budget always reflected what it had cost in the past, not what it should or would cost in the future. The United Nations also needed a better understanding of the fraud risks it faced, in particular external fraud risks, across all of its activities, including peacekeeping, global procurement and humanitarian affairs. There was a need to develop a strategic and integrated counter-fraud strategy, along with clear protocols for staff to follow when fraud cases emerged.
The representatives of Bolivia, speaking on behalf of the “Group of 77” developing countries and China, and of the European Union Delegation and the United Republic of Tanzania stressed the importance of the Board’s work in improving the governance of the United Nations, and expressed its readiness to study and discuss its reports.
Mr. MORSE said he was very grateful for the positive comments. The Board tried to tread a line between what was practical in such a broad Organization with many independent elements and the need, in the current environment, for the United Nations to carry out its enormous responsibilities, in a cost-effective and efficient manner.
GEORGE A. BARTSIOTAS, Inspector of the Joint Inspection Unit (JIU), introduced the Unit’s report titled “Review of the management of implementing partners in United Nations system organizations” (document A/69/378). The report provided a review of the methods and processes that the United Nations, its funds and programmes and specialized agencies used to select and manage their implementing partners. It identified common challenges, explored areas for improvement and made recommendations. Implementing partners — third parties with whom organizations sealed agreements and allocated resources to implement their programmes and activities — could include host Government entities, non-governmental organizations or civil society. In some organizations, more than half of the annual budget was spent through them.
The review found that, despite the large volume of funds channelled through implementing partners and their important role in delivering United Nations programmes, very few organizations had robust strategies, policies and procedures in place to select and manage their partners, he said. Compliance with policies and procedures was not always consistent. There were positive trends, however, with organizations making concerted efforts to improve the management of implementing partners by strengthening due diligence mechanisms, and updating their policies and procedures. Some of the recommendations highlighted in the JIU report included the need for a strategic approach in engaging with partners; in-depth assessments of the implementing partner; strong, legal agreements that included important provisions, such as anti-fraud clauses; the need for robust and effective monitoring of projects.
In addition, he said, the decentralized environment in which most United Nations system organizations operated was prone to fraud, and the Auditors’ Board and other oversight bodies had indicated that the fraud reported by United Nations agencies was unusually low. During the review, the JIU noticed a lack of fraud awareness among staff on the ground, and lack of anti-fraud training. That was an area of concern because, usually, most fraud cases were exposed through reports by knowledgeable and alert staff.
Other areas of concern were the fragmentation of data as information was dispersed among many offices and automations systems, and the insufficient sharing of information on the partners among the United Nations organizations, he said. “No consultation precedes the signing of partners’ agreements, and there are reported cases of no information sharing among organizations, even on partners with poor performance record,” he said. “This lack of information among UN peers is a major barrier to fraud detection.” The report recommends that organizations establish operational procedures for sharing partner information on the ground.
Mr. Bartsiotas said it was time for the Chief Executives Board for Coordination (CEB) to address the issue of implementing partners. In response to the JIU recommendation to include this topic in the CEB agenda, CEB members had stated they did not see the need for regular discussions on this topic, but only on an occasional basis and as required. “The evidence, however, and our report findings argue that the time for the CEB to address implementing partners is now,” he said.
KENNETH HERMAN, Senior Adviser on Information Management Policy Coordination at the CEB, introduced the note by the Secretary-General (document A/69/378/Add.1) transmitting his comments and those of the CEB on the JIU report. He said the agencies welcomed, without reservation, many of the recommendations; for example, full agreeing with recommendation 6, to strengthen the implementing partner agreements in order to safeguard their interests, as well as recommendation 8, which urges training for fraud prevention and awareness.
In other cases, agencies agreed with the overall substance of the recommendations but were concerned regarding their implementation, he said. For example, regarding the importance of assessing implementing partners, found in recommendation 4, the agencies agreed with the need for assessments. But they suggested the various shapes and sizes of partners meant it may not be possible, or prudent, to perform an assessment aimed at establishing capacity, weaknesses, and risks. The agencies also noted that training, studies, and tracking within automated systems, required investment, and resources were increasingly difficult to identify.
Construction and Property Management at Economic Commission for Africa (ECA)
COLLEN V. KELAPILE, Chief of Staff and Officer-in-Charge, Division of Administration, Economic Commission for Africa (ECA), introduced the report of the Secretary-General on Progress in the construction of additional office facilities at the Economic Commission for Africa in Addis Ababa, proposals for the renovation of conference facilities, including Africa Hall, and revised estimates relating to the programme budget for the biennium 2014-2015 under section 18, Economic and social development in Africa, section 33, Construction, alteration, improvement and major maintenance, and section 34, Safety and security (document A/69/359).
He said that the construction of the new office facility was substantially completed on 19 June 2014, with the premises already fully occupied by the United Nations Office for Project Services (UNOPS), United Nations Office to the African Union/United Nations Hybrid Operation in Darfur (UNAMID), World Health Organization (WHO), Office of the United Nations High Commissioner for Refugees (UNHCR) Liaison Office to the African Union and ECA, and the United Nations Children’s Fund (UNICEF). Ancillary projects, including construction of internal access roads, parking upgrades, civil and landscaping works, permanent lighting, final sanitary works, and some interior finishes, were scheduled to be completed by the end of 2015.
The remaining works for the renovation of conference facilities, including creation of access for persons with disability, would be completed in 2016/2017. Regarding the Africa Hall, which was inaugurated in 1961 as a gift from Ethiopia, the first two of the five stages for renovation had been completed. The remaining phases would cost nearly $57 million over a period of seven years.
CARLOS G. RUIZ MASSIEU, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced the Advisory Committee’s related report (document A/69/415). ACABQ welcomed the substantial completion of the new office facility and its full occupancy by August 2014. In view of existing capacity, the Advisory Committee also recommended that the Assembly approve the establishment of 14 of the 18 additional security officer posts, proposed to handle the increased workload resulting from the facility’s addition to the ECA complex.
Regarding the renovation of the Africa Hall Building, the Advisory Committee recommended the Assembly proceed to stage 3 and approve additional resources for the development of the detailed design and tender documentation, he said. It recommended the Assembly ask the Secretary-General, in his next progress report, to provide detailed cost estimates for each phase of the project. It also recommended that the estimates for increased costs and contingency funds for the renovation project should be estimated and managed in accordance with previous recommendations on construction projects.
DAYANA ANGELA RIOS REQUENA (Bolivia), speaking on behalf of the “Group of 77” developing countries and China, stressed the need to ensure the timely and full completion of the remaining ancillary work, and to avoid further delay and a possible cost overrun. Taking note that, as of August, the new facilities hosted 685 staff — more than the planned 647 — she sought detailed clarification on elements of cost-recovery arrangements on services provided to the occupying entities. The Africa Hall renovation was still at the conceptual and design stages, and the Group was eager to hear reasons for the delay, and receive information on accountability and oversight measures to avoid further delays. The Group urged the Secretary-General once again to take all necessary steps to complete the project on time and within the budget.
KODJOVI DOSSEH (Togo), speaking on behalf of the African Group, aligned himself with the statement made by Bolivia on behalf of the Group of 77 and China, and commended the Government of Ethiopia for its support of the implementation of those important projects. The construction of additional office facilities, the renovation of conference spaces and Africa Hall were of major interest to the Group. He welcomed the progress on those projects and urged the Secretary-General to ensure they were completed in their entirety. He stressed the importance of drawing upon the lessons learned during those construction projects, including the Capital Master Plan. Regarding the renovation of Africa Hall, the Group supported strict compliance with the highest international standards. It supported efforts to increase the use of conference rooms.
AMAN HASSEN BAME (Ethiopia) aligned his country with the statements made by Bolivia, on behalf of the Group of 77 and China, and with Togo, on behalf of the African Group. He noted the successful completion of the construction of the additional office facilities in June 2014, and the premises’ full occupancy by August 2014. The additional office facilities comprised a seven-story building which could accommodate 685 occupants, and he welcomed the proposal for 18 more security officers.
Turning to the renovation of conference facilities, including the Africa Hall, he said the Hall was one of Addis Ababa’s landmarks and had hosted numerous high-level meetings, and had been the site of historic decisions. The consultant’s assessment of the structure revealed deterioration and numerous deficiencies, which had to be urgently addressed if the building was to remain safe and functional. Ethiopia agreed with the Advisory Committee that the Assembly might wish to authorize the Secretary-General to proceed to the third stage of reconstruction, so development of the detailed design, construction drawings, and tender documentation could begin according to plan.
Work on the structure was expected to take about seven years, from 2015 to 2021, and the cost for the renovation of the Hall, its adjunct visitor areas, andassociated security enhancements was estimated at nearly $57 million. He repeated the Ethiopian Government’s assurance to provide guaranteed access for the import of all materials and any other measures needed to smooth the project’s implementation.
EVGENY V. KALUGIN (Russian Federation) noted that ACABQ recommended that the Assembly ask the Secretary-General to ensure that the remaining ancillary work be fully completed on time. The Secretary-General’s request to create 18 security officer posts must be carefully studied. Renovating Africa Hall would cost $57 million over the next seven years. That plan must be carefully examined as well. His delegation asked the Secretary-General to comment on the proposal by ACABQ for a multi–year special account for renovating the Hall.
JUSTIN KISOKA (United Republic of Tanzania) said the poor quality of the video telecommunications services at the ECA offices had been discussed at previous meetings. He also noted the poor quality of the presentation made today. He was not sure if the technical problem was occurring in New York or in Addis Ababa. He hoped the issue would be corrected during the renovation.
Mr. KELAPILE, speaking via video conference from Addis Ababa, said the Commission was working on correcting various technology issues, not just malfunctioning video telecommunications services. He agreed fully that those technical issues had to be corrected. Budget restrictions had reduced travel to New York Headquarters and increased dependence on video-conferencing services.