Budget Committee Approves Resolution Asking for More Internal Oversight of Fraud, Begins Debate on Newly Launched Umoja Business Transformation Project
The Fifth Committee (Administrative and Budgetary) today approved a draft resolution stressing the need for the United Nations internal oversight body to place increased emphasis on investigations into frauds. The Committee also started its examination of the newly launched Umoja business transformation system.
Through the text on the activities of the Office of Internal Oversight Services (OIOS), the General Assembly would request that the Secretary-General ensure all relevant resolutions pertaining to the Office’s work were brought to the attention of the appropriate managers. The Secretary-General would also be asked to provide detailed justifications for the Office’s recommendations that were not accepted and ensure that the accepted recommendations, including those relating to cost avoidance, recovery of overpayments, efficiency gains and other improvements, were fully and promptly implemented.
On Umoja, Yukio Takasu, Under-Secretary-General for Management, introducing the Secretary-General’s report on the subject, said that although the Umoja project was not complete, its Integration solution had been in place across the United Nations Secretariat on schedule. The Integration solution comprises the project’s foundation, or first phase, which includes business processes such as finance, procurement and asset management, as well as Extension 1, the second phase, which involves functionalities related to human resources, travel and personnel entitlements. Extension 2, the third and last phase of the project, is forthcoming.
Describing the Integration solution’s deployment as “no small accomplishment,” Mr. Takasu said that the Secretary-General and senior management remained committed to realizing the qualitative and quantitative cumulative benefits in the overall range of $140 million to $220 million by 2019. He also said the resource requirements for the biennium 2016-2017 remained unchanged at $54.3 million for now, but the Secretariat intended to submit revised estimates to the Assembly for consideration during the Fifth Committee’s first resumed session in 2016.
Salhina Mkumba, Director of External Audit and Chair of the Audit Operations Committee of the Board of Auditors, presented that body’s related report, saying the Board felt the weakness in preparing staff for the subsequent changes and the gaps in post-implementation support arrangements created additional risks to the implementation strategy. The Administration had not developed adequate contingency plans to mitigate the known risks. Significant challenges had been encountered with previous Umoja deployment in peacekeeping operations due to the lack of organizational readiness.
Regarding Umoja’s deployment and organizational readiness, the Administration continued to be driven by the published project schedule to determine its roll-out plans, rather than any objective assessment of the Organization’s readiness or ability to manage business change to generate the expected benefits, he said. The Administration expected the cost to total $439.4 million by the end of 2016-2017. The Board could give no assurance that the full scope of Umoja could be delivered within the current cost estimates. To maximize the project’s successful implementation, the Board made seven recommendations, which were listed in the body’s report.
Carlos Ruiz Massieu, Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introducing that body’s related report, noted that the Umoja Extension 2 solution compromised 133 processes for budget formulation, supply chain management, grant management, programme management, force management, and conference and event management. It was the Assembly’s prerogative to decide the course of action on the solution’s implementation and the Secretary-General should be asked to submit proposals, for the full implementation of the Umoja solution, for the Assembly’s consideration. ACABQ recommended that the Assembly ask the Secretary-General, in his forthcoming report, to develop and submit a detailed action plan to ensure the knowledge base was maintained within the Organization. Pending consideration of that plan, the Assembly should give the Secretary-General, as an exceptional temporary measure, authority to postpone the planned downsizing of the Umoja team in 2016.
Several delegates concurred the views of the Board of Auditors and ACABQ on organizational readiness, in-house capacity to support core Umoja activities, cost escalation for the remaining phases of the project, delays in the implementation of the project schedule, and lack of transparency on the full cost of the project as well as the lack of a consistent delivery and benefit plan.
South Africa’s delegate, speaking for the “Group of 77” developing countries and China, highlighted the importance of knowledge transfer to the Information and Communications Technology (ICT) Office, and voiced concern that the Secretariat had not established a clear baseline from which the achieved benefits could be measured.
Cuba’s delegate underscored the need for a clear benefit realization plan, without which he said it would be difficult to examine budget proposals that would lead to financial and staffing cuts.
The European Union attached great importance to implementing Umoja Extension 2, its representative said, noting that the “budget module” would have to provide better granularity of data, enabling managers to have better knowledge of activity costs and improving the budget formulation process. That would also aid Member States in decision-making, he added.
Japan’s delegate said that Umoja was a long-term project and now was the time for Member States to show patience and continue to give sufficient support to its implementation.
In other business today, the Fifth Committee heard Gopinathan Achamkulangare, Inspector of the Joint Inspection Unit, introduce the Secretary-General’s note transmitting the report of the Unit’s review of the management and administration of the Office of the United Nations High Commissioner for Human Rights (OHCHR). Mario Baez, Chief of Policy and Oversight Coordination Services of the Office of the Under-Secretary-General for Management, introduced the Secretary-General’s note transmitting his comments on the recommendations contained in the Unit’s report.
Also speaking today were the representatives of Switzerland (also for Liechtenstein), the United States and Kuwait.
The Committee will meet again at 10 a.m., Wednesday, 25 November, to discuss the proposed programme budget for biennium 2016-2017 for special political missions and the Secretary-General’s request for a subvention to the Extraordinary Chambers in the Courts of Cambodia.
Enterprise Resource Planning Project - Umoja
YUKIO TAKASU, Under-Secretary-General for Management, introduced the Secretary-General’s seventh progress report on the enterprise resource planning project (documents A/70/369, Corr.1 & Corr.2), noting that the Integration solution of the Umoja enterprise resource planning system had been deployed across the United Nations Secretariat on schedule, before the end of 2015, as mandated by the General Assembly resolution 67/246. “This is no small accomplishment” and a once-in-a-generation change, he said, adding that Umoja was now the “daily solution” with more than 31,000 staff members as its end users. He went on to elaborate some key issues, including governance and project leadership, oversight bodies’ recommendations, challenges and preparations for future roll-outs, benefits realization and resource requirements.
One of the most difficult challenges was the volume of work regarding data cleansing, conversion, and validation, he said, stressing the need to continue overcoming the remaining issues until the new operating model was stabilized and internalized. The Secretary-General and senior management remained committed to realizing the qualitative and quantitative cumulative benefits in the overall range of $140 million to $220 million by 2019. At $54.3 million, the resource requirements for the biennium 2016-2017 remained unchanged for now, but the Secretariat intended to submit revised estimates to the Assembly for consideration during the Fifth Committee’s first resumed session in 2016.
SALHINA MKUMBA, Director of External Audit and Chair, Audit Operations Committee, Board of Auditors, introduced the Secretary-General’s note transmitting the fourth annual progress report of the Board of Auditors on the implementation of the United Nations enterprise resource planning system (document A/70/158). He said the scale of challenges surrounding Umoja’s implementation in clusters 3 and 4 - in more than 60 entities for some 23,500 users - could not be underestimated and the report focused on project management, the Umoja deployment strategy and organisational readiness, support arrangements, risks around the current deployment schedule and Umoja’s cost and benefits. If implemented successfully, and notwithstanding the risks, Umoja was a unique opportunity to drive more cost-effective delivery of mandates. Yet the Board considered that the weakness in preparing staff for the subsequent changes and the gaps in post implementation support arrangements introduced additional risks to the implementation strategy. The Administration had not developed adequate contingency plans to mitigate the known risks. Significant challenges had been encountered with previous Umoja deployment in peacekeeping operations due to the lack of organizational readiness, and there was a high risk similar problems would emerge in June and November 2015.
Regarding the deployment of Umoja and organizational readiness, the Administration continued to be driven by the published project schedule to determine its roll-out plans, rather than any objective assessment of the readiness of the Organization or the ability to manage business change to generate the expected benefits, he said. The implementation according to the current project schedule remained optimistic and high risk rather than realistic. The Administration’s contingency planning was poorly developed. The Administration assumed it could deploy additional resources to address any protracted problems, as it did with coping with the roll-out of clusters 1 and 2. But the scale of the challenge in implementing clusters 3 and 4 was a different order of magnitude because of its complexity and the number of users spread around the world. There were gaps in the areas of training, user testing, data conversation, and post-production support, he added.
Regarding the mainstreaming of Umoja support, the Board believed plans to transition from the project team to the Office for Information Communication Technology had not been prepared, he said. In addition, the feasibility and costs of the transition were uncertain. The Administration expected the cost to total $439.4 million by the end of 2016-2017. The Board could give no assurance the full scope of Umoja could be delivered within the current cost estimates. In addition, the Administration had not provided credible support for the estimated financial benefits expected from 2017 onward. The Administration was committed to the delivery of cumulative quantitative benefits of $140 million to $220 million by 2019. To maximize the project’s successful implementation, the Board made seven recommendations, included in paragraph 19 of the report. If carried out successfully, the recommendations would, among other goals, increase the level of ownership by heads of business units at Umoja and reduce the level of risk around the current deployment approach.
CARLOS RUIZ MASSIEU, Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced that body’s seventh progress report on Umoja - its twentieth report on the 2016-2017 proposed programme budget (document A/70/7/Add.19). He noted that the Umoja integration solution had been deployed in cluster 3 entities in June 2015 and was underway in cluster 4 entities. The Advisory Committee was concerned that significant problems encountered during the integration process of those two clusters would impact project plans and costs, and again stressed the need for implementation of the project’s full scope, as approved by the Assembly in resolution 67/246. That particularly included the Umoja Extension 2 processes, which compromised 133 processes for budget formulation, supply chain management, grant management, programme management, force management, and conference and event management. It was the Assembly’s prerogative to decide the course of action on the solution’s implementation and the Secretary-General should be asked to submit proposals, for the full implementation of the Umoja solution, for the Assembly’s consideration.
The Advisory Committee emphasized the need for transition plans, pending transfer of responsibility to the Organization’s Chief Information Technology Officer planned for 2017, under the current mainstreaming plan, he said. It was essential that the Umoja integration solution was maintained and updated centrally in a well-coordinated manner for the entire Secretariat. Effective controls had to be in place to avoid the creation of ad hoc departmental groups and teams for support and maintenance. Regarding project staffing, ACABQ believed the on-going loss of skilled personnel was one of the highest risks to the project’s successful completion. It recommended that the Assembly ask the Secretary-General, in his forthcoming report, to develop and submit a detailed action plan to ensure the knowledge base was maintained within the Organization. Pending consideration of that action plan, the Assembly should give the Secretary-General, as an exceptional temporary measure, authority to postpone the planned downsizing of the Umoja team in 2016.
KAREN LINGENFELDER (South Africa), speaking for the Group of 77 developing countries and China, welcomed the steady progress achieved thus far, but voiced concern that significant challenges and risks remained, as pointed out by the Board of Auditors and ACABQ, including those related to organizational readiness, in-house capacity to support core Umoja activities, cost escalation for the remaining phases of the project, delays in the implementation of the project schedule, lack of transparency on the full cost of the project as well as lack of a consistent delivery and benefit plan. The Group also remained concerned about the post-deployment issues namely accountability, required resources, level of coordination as well as a shortage of trained experts in many departments.
The Group shared the views of the Board of Auditors and ACABQ on the importance of knowledge transfer to the ICT Office, and looked forward to receiving assurances that the transfer of responsibility to the Office would further enhance the Umoja integration solution, she said. The Secretariat had not established a clear baseline from which the achieved benefits could be measured. The Group viewed the formation of the dedicated project team to determine how the benefit realization targets would be achieved as an opportunity to refresh the business case presented six years ago. The Group stressed the need to ensure that a benefit realization plan provided more clarity on how data from Umoja would be used to deliver benefits.
MATTHIAS DETTLING (Switzerland), also speaking on behalf of Liechtenstein, said that the deployment of Umoja Integration in the cluster 3 and cluster 4 entities, in line with the current deployment schedule, was a significant milestone. At the same time, he expressed concern that the shortfall of training and weak preparation of the different business units regarding the Umoja deployment would impact the project schedule, and it was possible that additional time would be required to stabilize the system in clusters 3 and 4. At the end of the day, technical deployment of the system was not more important than the successful re-integration of business processes and the realization of a lasting cultural change throughout the United Nations. Umoja Extension 2 would be a necessary and worthwhile investment.
Finally, he said that it was necessary to be more realistic about the benefits of Umoja. Most benefits would be of a qualitative nature such as more timely and improved data, faster processes, better internal control, and improved risk management, as well as better informed and more accountable decision making. However, it was clear from the experiences of the enterprise resource planning projects in the private sector that the impact of Umoja on the staff population in support functions would be moderate. Rather, the Organization could expect to see staff working smarter and with better tools.
JAN DE PRETER, speaking on behalf of the European Union, stressed the Union’s continued strong supporters for implementing Umoja and welcomed the deployment of the Umoja Integration solution to cluster 4 entities on 9 November as an important milestone. He agreed with the Board of Auditors’ comments on the need to evaluate the case for an Umoja optimization project, and that continuous improvements must be made in order to fully exploit opportunities from implementing the solution and to adopt industry best practices. The Union also attached great importance to implementing Umoja Extension 2. The “budget module” would have to provide better granularity of data, enabling managers to have better knowledge of activity costs and improving the budget formulation process. That would also aid Member States in decision-making. He concurred with the Advisory Committee that implementation of the project’s full scope was necessary to protect the investment already made by Member States, and looked forward to discussing in more detail how the Organization would ensure that the valuable skills and expertise of Umoja project staff were retained going forward.
He stressed the importance of a continued and strengthened commitment of senior management and process owners to Umoja’s successful deployment in their respective areas. That included their responsibility and accountability for ensuring organizational readiness and standard business process adoption. Umoja was now the daily solution used by United Nations staff in offices around the world, including 33 peacekeeping missions, and ensuring that those new ways of working were fully embedded was crucial for the project’s success.
AMIT UPADHYAY (United States) said that the United Nations over the past several years had embarked on an ambitious and transformative reform agenda. Central to it was Umoja, which, as a tool paired with mobility and other reform initiatives, would enable the Organization to be “reborn” through the Global Service Delivery Model. Now Umoja must live up to its promise. His delegation was encouraged that the Secretary-General planned to bolster business reengineering capacity to continue to better leverage the Umoja integration solution. The focus must remain on the opportunity to streamline and restructure business processes after Umoja’s implementation. The Secretary-General should ensure qualitative and quantitative benefits that more than justified the time, effort and investment in Umoja.
HAJIME KISHIMORI (Japan) welcomed the progress achieved through the deployment of clusters 3 and 4, notably the successful roll-out here in New York earlier this month. “This is a big step but still an initial step,” he said, expressing concern about delays in the deployment of the project’s Extension 2. His delegation expected the Secretary-General to submit to the Assembly a report that would include the reassessment of Extension 2 for its consideration during the first resumed part of its seventieth session. Umoja was a long-term project, which had been making progress and yielding qualitative changes in the United Nations system. Now was the time for Member States to show patience and continue to give sufficient support to Umoja implementation.
Mr. AL SURAYYE (Kuwait), aligning his country with the Group of 77, welcomed the progress made toward the full deployment of Umoja and the project’s rolling-out worldwide in peacekeeping operations and special political missions. Yet Kuwait was concerned with the challenges noted by the Board of Auditors and ACABQ. Kuwait stressed the importance of adhering to timelines in the project’s implementation. The ICT Office was playing an important role as the project faced international challenges. The payment by Member States of their assessed contributions in full and on time was essential to the project’s successful implementation and would help the Organization fulfil its mandates and carry out its plans. The oversight provided through the risk management function, according to the project’s terms, was critical to the implementation of a robust and successful system.
JAVIER ENRIQUE SANCHEZ AZCUY (Cuba), associating himself with the Group of 77, said that the Board of Auditors’ and ACABQ’s recommendations must be accepted, but his delegation was also mindful that any project needed adjustments. Cuba would patiently await the project’s completion in order to fully analyse its benefit realization. To see a “happy ending”, senior management’s firm commitment and ownership of all staff were crucial. He backed the view of ACABQ on the need for a clear benefit realization plan, without which it would be difficult to examine budget proposals that would lead to financial and staffing cuts. His delegation would also pay due attention to the transfer of responsibility to the ICT Office. The most difficult challenge was to train people. In that regard, it was vital to transfer knowledge of external consultants to internal staff, and retain qualified personnel. He took note of the continuous cost increases, which would sap resources from the regular budget that funded the three pillars of the Organization’s mandate.
Responding to concerns voiced by delegates, Mr. TAKASU said that Umoja was not simply an information technology project, but a major business transformation programme impacting the next generations of staff. Noting that Umoja had not reached its final destination yet, he assured delegates that the Secretariat viewed Umoja as a top priority and was committed to reaching that destination by addressing issues related to organizational readiness, senior management commitment and staff retention, among others.
Office of the United Nations High Commissioner for Human Rights
GOPINATHAN ACHAMKULANGARE, Inspector of the Joint Inspection Unit (JIU), introduced the Secretary-General’s note transmitting the report of the Unit’s review of the management and administration of the Office of the United Nations High Commissioner for Human Rights (OHCHR) (document A/70/68). The Unit’s review responded to a March 2013 request of the Human Rights Council and contains six formal recommendations covering governance and oversight by Member States, risk management, strategic planning, geographical distribution of staff, human resources management and the mainstreaming of human rights across the United Nations system.
The report was the first full-fledged review of OHCHR by the Unit in more than a decade and it supported the Office’s ongoing reform as it identified areas for improvement. The Unit accounted for the Office’s specific nature, its important role and ensured that nothing in the review would infringe upon, or adversely impact, the High Commissioner’s independence. The report had made a compelling case for substantially increasing the regular budget resources of the Office and reaffirmed that Member States had the primary responsibility for addressing governance and oversight-related issues. The recommendations included the creation of a risk management policy, by the end of 2016, which would envelop all the elements of a comprehensive risk management framework and report annually to the governing bodies on its implementation.
MARIO BAEZ, Chief, Policy and Oversight Coordination Services, Office of the Under-Secretary-General for Management, introduced the Secretary-General’s note transmitting his comments on the recommendations contained in the Joint Inspection Unit’s report on the review of the management and administration of OHCHR (document A/70/68/Add.1), on behalf of Mr. Takasu. Some of the recommendations included in the Unit’s report would be implemented by the Office and others would need more consideration, bearing in mind that the Office was a department of the Secretariat and belonged to the Secretariat’s governance structure. The Administration appreciated the report’s observations regarding the Office’s long-term challenges, such as its financial sustainability in the face of increasing mandates from legislative bodies and the expanding demands connected to human rights, mainstreaming human rights across the United Nations system and emphasizing human rights in the post-2015 development agenda. The Administration was confident the report would help the Office manage its resources and increase its efficiency.
Office of Internal Oversight Services/Independent Audit Advisory Committee
The Fifth Committee approved without a vote a two-part draft resolution on the activities of OIOS and the activities of the Audit Advisory Committee (document A/C.5/70/L.5). Regarding OIOS, by the text’s terms, the General Assembly would ask the Secretary-General to ensure the Office’s annual reports always included a brief description of any impairment of the Office’s independence and ensured the full and prompt implementation of the Office’s accepted recommendations, including those related to cost avoidance, recovery of overpayments, efficiency gains and other improvements. The Assembly would also ask the Secretary-General to provide detailed justification when the Office’s recommendations were not accepted. The need for the Office to increase its emphasis on investigations involving cases of fraud was stressed and the text recognized the Office’s role in helping the Organization assess, analyse and act on all fraud risks would also be stressed and the Secretary-General would be asked to keep moving on filling the Office’s remaining vacancies, particularly in the Investigations Division and in the field.
Regarding the activities of the Audit Advisory Committee, the Assembly would note its appreciation of that body’s work after considering its annual report, which covered the 1 August 2014 to 31 July 2015 period. The Assembly would invite the Audit Advisory Committee to continue to examine the operational independence of the OIOS, particularly in the area of investigation functions.