As Top Management Official Unveils 2016-2017 Outline to Fifth Committee, Delegates Fret over Budget Formulation Methods, Rising Cost of Special Political Missions
The United Nations regular budget for the biennium 2016-2017 would increase by almost $160 million, or 2.9 per cent, from the current two-year period, to reach a record $5.7 billion, primarily due to the need to support new special political missions, the Fifth Committee (Administrative and Budgetary) heard today.
Briefing on the Secretary-General’s preliminary budget proposal, Yukio Takasu, Under-Secretary-General for Management, said that the regular budget for 2016-2017 would total $5.698 billion, including requirements for special political missions. But were it not for a net increase in the requirements for special political missions, the regular budget would have decreased by $3.4 million, or 0.1 per cent. The regular budget over the last four bienniums had remained fairly steady, except the provisions for special political missions that hinged on Security Council decisions, he said, stressing that the Secretary-General, since taking office, had made real efforts to reduce the budget and that the proposed outline continued on that path.
Mr. Takasu also said that the Secretariat sought to provide the fullest picture of predictable necessary resources by including requirements for new mandates, essential operational needs foreseen for the biennium, initiatives currently before the General Assembly and even programmes in the pipeline that had yet to be tabled. Failure to include foreseen requirements in the budget outline would result in subsequent piecemeal requests, a consequence that Member States had decided to avoid by adopting Assembly resolution 41/213.
The Secretariat had used the $5.538 billion approved for the biennium 2014-2015 as a starting point for determining the preliminary budget estimate for 2016-2017, factoring in the benefits to be realized through implementation of Umoja, the Organization’s enterprise resource planning system.
Carlos Ruiz Massieu, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), said that the latest approved level of resources for the current mandates of special political missions should be used as the basis for estimates for 2016-2017. The budget outline should also distinguish between estimates in support of mandated activities and those that were yet to be considered or were under consideration by the Assembly. The United Nations Mission for Ebola Emergency Response (UNMEER) should be included in the latter category. Furthermore, details of the $30 million in decreases attributed to Umoja should be presented to the Assembly prior to its consideration of their budgetary impact.
The representative of Bolivia, speaking on behalf of the “Group of 77” developing countries and China, said that Secretariat had used the interpretation of the budget outline to impose cuts on a number of sections of the budget for 2014-2015, on the basis that it represented the Assembly’s guidance. The Group would not accept a repeat of such a situation and demanded full disclosure of mandated activities, and transparency on all activities that would affect the 2016-2017 budget.
The Group was concerned about an increase of 15.1 per cent, or $163.3 million, over the estimated biennial provision for special political missions, which meant that the increasing portion of the regular budget was devoted to peace and security activities, to the detriment of the Organization’s development activities. That trend went against the Assembly’s priorities and could hinder the Organization’s ability to effectively implement the post-2015 development agenda. The Group was also concerned that the estimates related to UNMEER were not included in the budget outline.
Some Committee members called into question the Secretariat’s method for formulating the budget outline, with a representative of the European Union Delegation expressing disappointment that the proposal was “merely a list of additions to the current budget” and Japan’s representative requesting that the Secretariat draw up the budget outline by taking a “true look at needs” rather than simply extending the 2014-2015 budget, which would lead to a record-high regular budget.
The United States’ representative called for reform of “recosting,” which would allow the United Nations to seek additional funding for such factors as exchange rate variances and inflation.
Also speaking today were the representatives of Morocco (also on behalf of Mexico, Norway, Switzerland and Turkey), and the Russian Federation.
During the meeting, Mr. Takasu introduced the Secretary-General’s report on the proposed programme budget outline for the biennium 2016-2017; Mr. Ruiz Massieu presented ACABQ’s eponymous report.
The Committee will meet again at 10 a.m., on Friday, 21 November, to take up the issue of strategic heritage plan at the United Nations Office at Geneva.
Introduction of Reports: Proposed Programme Budget for Biennium 2016-2017
YUKIO TAKASU, Under-Secretary-General for Management, introduced the Secretary-General’s report on the proposed programme budget outline for the biennium 2016-2017 (document A/69/416), which estimated that the overall regular budget for that period would total $5.698 billion, an increase of $159.9 million or 2.9 per cent from the current biennium, including requirements for special political missions.
He said that the regular budget over the last four bienniums had remained fairly steady, except the provisions for special political missions that fluctuated due to Security Council decisions on new and expanded mandates. Since taking office, the Secretary-General had made real efforts to reduce the budget, with the proposed outline continuing on that path. Excluding a net increase in the requirements for special political missions, the regular budget would decrease by $3.4 million, or 0.1 per cent, in the biennium 2016-2017.
Mr. Takasu said that the Secretariat sought to provide the fullest picture of predictable necessary resources by including requirements for new mandates, essential operational needs foreseen for the biennium, initiatives currently before the Assembly and even programmes in the pipeline that had yet to be tabled. Failure to include foreseen requirements in the budget outline would result in subsequent piecemeal requests, a consequence that Member States had decided to avoid through the adoption of Assembly resolution 41/213.
The Secretariat took the $5.538 billion approved for the biennium 2014-2015 as a starting point for the preliminary estimate of resources for 2016-2017 and then factored in both expected cost reductions and new requirements, he said. One-time costs in 2014-2015 totalling $95.6 million would no longer be needed in the next biennium. The 38 newly established posts in 2015 would require an additional $6.8 million for the biennium 2016-2017. Also included were the $26.1 million to support new mandates and $33.1 million in foreseen costs for essential operations, such as staff costs for the incoming Assembly President and post-Capital Master Plan maintenance. Preliminary indicative requirements for special political missions reflected a net increase of $163.3 million.
Mr. Takasu said that $49.9 million would be required for initiatives currently before the Assembly and those that had yet to be presented to the 193-nation body, including $14.6 million associated with the construction of facilities of the Economic Commission for Africa (ECA), $14.4 million for the Umoja enterprise resource planning project and $9 million for a strategic capital review. That total, however, would be offset by $30 million in cost savings to be realized by Umoja implementation, he said, noting that the Secretary-General intended to incorporate Umoja benefits realization into the appropriate budgeting cycle. As for the size of contingency fund, it should remain at 0.75 per cent of the regular budget for 2016-2017.
CARLOS RUIZ MASSIEU, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introducing his body’s eponymous report (document A/69/556), pointed out that the preliminary budget estimate of $5.698 billion in the Secretary-General’s report included initiatives currently under consideration by the Assembly, and that preliminary estimates based only on established activities would actually amount to $5.645 billion. That figure included the biennium provision of $1.25 billion for special political missions in 2016-2017, and reflected a projected increase of $169.3 million due primarily to the establishment of new missions. The latest approved level of resources for the current mandates should be used as the basis for estimates relating to special political missions on the budget outline.
Continuing, he said that the total $33.4 million in estimates included initiatives yet to be considered by the Assembly as well as estimates relating to activities previously approved by that body. The budget outline should distinguish between estimates in support of mandated activities and those that were yet to be considered or were under consideration by the Assembly. He noted specifically that the United Nations Mission for Ebola Emergency Response (UNMEER) should be treated similarly to the initiatives currently reflected in Annex II of the Secretary-General’s report. Furthermore, the $30 million in decreases attributed to Umoja benefits expected in each area should be presented to the Assembly prior to its consideration of their budgetary impact.
He also noted a few inconsistencies in the presentation of the document as well as in the application of the established terminologies and recommended that further clarification be provided to the Assembly. The Advisory Committee recommended approval of the Secretary-General’s proposal that for the 2016-2017 biennium the level of the contingency fund be maintained at 0.75 per cent of the overall budget level for the biennium.
Statements
DAYANA ANGELA RIOS REQUENA (Bolivia), speaking on behalf of the “Group of 77” developing countries and China, said the proposed budget outline should have presented the fullest possible picture of the Organization’s estimates of resources for the coming biennium. The Group recalled with great regret the situation surrounding the approval of the budget outline for the 2014-2015 biennium, when Member States were deprived of essential information to act on the budget outline resolution. The interpretation of the budget outline was regrettably used by the Secretariat to impose cuts on a number of sections of the budget for 2014-2015, on the basis that it represented the Assembly’s guidance. The Group would not accept a repeat of such a situation and demanded full disclosure of mandated activities, and transparency on all activities that would affect the 2016-2017 budget.
She noted that the preliminary estimates of resources for the biennium 2016-201 totalled $5.64 million, based on established activities. The Group was concerned with the total net projected decrease in programme resources of 0.1 per cent, or $3.4 million, while there was an increase of 15.1 per cent, or $163.3 million, over the estimated biennial provision for special political missions. The Group was gravely concerned with the imbalance and the increasing portion of the regular budget devoted for peace and security activities, to the detriment of the Organization’s development activities. This trend went against the Assembly’s priorities and could hinder the Organization’s ability to effectively deliver on the post-2015 development agenda.
The Group was very concerned that the Secretary-General had included an overall decrease of $30 million, in the preliminary estimates for the 2016-2017 budget, which would be attributed to Umoja benefits realization, she said. The Assembly had asked the Secretary-General to elaborate a clear benefit realization plan for its consideration and approval. But that plan had not yet been presented. In that context, the Group could not accept decreases in the budget outline attributable to Umoja and it also was concerned with the Secretariat’s recent practice to propose reductions in the outline. The Group was very committed to the budgetary process established by Assembly resolutions 41/213 and 42/211, which set forth the technical and political foundations for the Committee’s work. It was concerned with the inconsistencies identified by ACABQ, particularly the incorporation of amounts related to initiatives under consideration by the Assembly. It was very concerned that the estimates related to UNMEER were not included in the budget outline.
OMAR HILALE (Morocco), also speaking on behalf of Mexico, Norway, Switzerland and Turkey, thanked Mr. Takasu and Mr. Massieu for their presentations. During his first press conference on 16 October 2014, the new High Commissioner for Human Rights expressed concern about the grave financial difficulties of his Office. In a joint letter addressed to the Secretary-General on 15 July 2014, Morocco, Mexico, Norway, Switzerland and Turkey, on behalf of 55 Member States, expressed their similar concerns about the lack of resources for the Office. In the budget overview, there was a small increase for human rights — a pillar of the Organization, and they were pleased by that. But the amount was insufficient to cover the needs of the Office. It was necessary to give the Office the required resources to carry out its mandates effectively and efficiently. Morocco would continue its commitment to secure lasting and equal resources for human rights.
CARMEL POWER, a representative of the European Union Delegation, pointing out the difficult economic background against which the budget outline for the 2016-2017 biennium was being examined, expressed disappointment that the proposal before the Committee was merely a list of additions to the current budget. The United Nations must deliver on its mandates through a budget based on a proper evaluation of what was actually necessary to carry out those activities. The most serious concern was the incremental way in which the Organization’s budgets were put together. In addition, the presentation of details in the proposal under consideration was confusing. The methodology was unexplained; the figures confusing and sometimes contradictory; and the overall approach lacked strategic depth. The impact would be budget growth on a scale that made tackling it an imperative. Recosting was unsustainable. The Organization must intensify efforts to innovate and improve working practices so as to manage resources as efficiently and effectively as possible. Business as usual was no longer an option.
SHO ONO (Japan) requested that the Secretariat consider the next proposed biennium budget on the basis of a “true look at needs” rather than of simply extending the 2014-2015 budget, as the proposed outline appeared to have done. Further, the entire picture of the next biennium budget was unclear, as the amount would increase, taking into account initiatives currently under consideration by the Assembly. He expressed disappointment at the lack of initiatives to “do more with less”, resulting in what would be a new record high for the regular budget. Including further mandates, the total could amount to $6 billion. He called upon the Secretariat to formulate concrete efficiency measures, including implementation of its comprehensive staffing review, streamlining obsolete activities and realizing further benefits from Umoja.
DONALD HAYS (United States) said the budget outline lacked a sense of strategic planning and reflected a cost-plus approach to budget management. The United States had consistently expressed deep concern about the practice of using the past biennium budget figures to form the next biennium budget. He supported the Advisory Committee’s call for an ongoing review of programme and business processes to ensure the most effective, efficient implementation of mandates. It was imperative that the strategic review of resources required for the upcoming biennium be completed with the understanding that Member States did not have limitless resources. Member States must be assured that funding provided to the United Nations was focused on the Organization’s top priorities. He noted the reduction proposed for the 2016-2017 biennium budget, attributed to the benefits of implementing Umoja. While he appreciated the Secretary-General’s efforts to reduce the budget level through outlined business processes, additional steps were needed. There was also ample room for a critical review of staffing requirements and corresponding staff reductions. The United States also wanted to see detailed information, requested by the ACABQ, on the experience of working with a single vacancy rate during the 2014-2015 biennium. “Our goal should be to make every penny work toward the goals established by the General Assembly,” he said.
The United States would also pursue recosting reform and the elimination of its impact on the budget, he said. It would also welcome a “robust discussion” about the Board of Auditors’ observation that the current budget process reinforced and perpetuated existing organizational structures. At the same time, that process deprived Member States of the flexibility needed to respond to changing needs and priorities by redirecting resources within the existing budget framework. ” There is no institution that is perfectly disciplined with its budget, but we know that the UN can do better,” he said in closing.
EVGENY V. KALUGIN (Russian Federation) said his delegation supported the conclusions of the Advisory Committee and its recommendation that the outline of the budget should be prepared while considering the Organization’s standing needs that have been approved by the Assembly. That would affect the planning of the Organization’s work and prevent a piecemeal approach in developing and presenting the budget. The delegation would like to see additional indicators regarding the savings resulting from the use of Umoja. Member States should see the advantages of the project before approving the 2016-2017 budget. The Russian Federation was ready to discuss those issues during informal consultations.
Fifth Committee Chairman FRANTIŠEK RUŽIČKA (Slovakia) said the budget issue needed additional clarification and balancing and looking into the available resources.