United Nations Financial Situation ‘Generally Sound and Positive’, Top Management Officials Tells Budget Committee
The financial health of the United Nations remained “generally sound and positive”, the Organization’s senior management official told the Fifth Committee (Administrative and Budgetary) today, adding that some areas still needed to be closely monitored and that Member States must make all efforts to meet their obligations.
In his semi-annual snapshot of the Organization’s financial situation, Yukio Takasu, Under-Secretary-General for Management, focused on assessment issues, unpaid assessed contributions, available cash resources and outstanding payments to Member States as he presented a detailed report on indicators at 31 December 2014 and 2015, and at 30 April 2015 and 2016.
His overview included details on the regular budget, United Nations peacekeeping operations, the international tribunals for the former Yugoslavia and Rwanda, and the Capital Master Plan account. (The Secretariat will incorporate this information into a report from the Secretary-General on improving the financial situation of the Organization that would be released for the Committee’s discussion at its 11 May meeting.)
Summing up the findings, Mr. Takasu said unpaid assessments were lower at the end of 2015 than in the previous year in all areas except the tribunals, and that cash balances were positive for peacekeeping, the tribunals and Capital Master Plan, with cash reserves covering a $217 million shortfall in the regular budget.
He said the regular budget cash would continue to face pressure this year given a reduced level of reserves resulting from General Assembly decisions regarding the use of the Special Account in recent years, as well as Assembly action to finance a significant level of activities with commitment authority, without assessment, during biennium 2016-2017. The final cash position towards the end of 2016 would depend largely on payments made by Member States in the coming months, he added.
For the 2015 regular budget, Member States were obliged to contribute a total of $2.771 billion, an increase of $159 million over 2014. Payments received were $237 million higher in 2015 than in 2014, he said. Unpaid assessed contributions stood at $1.43 billion as of 30 April 2016, down $163 million from the same period the previous year.
“The financial health of our Organization depends on Member States meeting their financial obligations in full and on time,” he said, urging them to continue to endeavour to do so.
Although the overall United Nations cash situation was currently positive for all categories at 30 April 2016, the regular cash budget was expected again to “tighten” towards the end of the year, he said. In that regard, he said the Secretariat would continue to monitor cash flows closely and ensure tight financial management.
Turning to peacekeeping missions, which operate on a 1 July to 30 June fiscal cycle, he said the total of unpaid assessments at the end of 2015 was $976 million, reflecting a decrease of $306 million compared with the outstanding $1.28 billion at the end of the previous year. As of 30 April, new assessments of $3.9 billion had been issued, of which $2.4 billion remained unpaid, he said. The fact that financial years and related legislative processes varied among Member States presented challenges to the peacekeeping budget, particularly as letters of assessment were being issued throughout the year for different missions based on the Security Council’s renewal of mission mandates.
Although the total cash available for peacekeeping, including the reserve, at the end of 2015 was almost $3 billion, that amount had been segregated in accordance with the Assembly’s decision to maintain separate accounts for each operation, which specified that no mission should be financed by borrowing from other active operations. At the end of 2015, $2.6 billion was in active missions’ accounts, $217 million in closed missions’ accounts and $139 million in the Peacekeeping Reserve Fund. With a continued acceleration of payments to cover troops, police units and contingent-owned equipment, outstanding payments to Member States — which totalled $824 million at the end of 2015 — was projected to drop to $818 million by the end of the year, he said.
Discussing the financial position of the United Nations international tribunals, he said that outstanding assessments at the end of 2015 stood at $65 million, up from $40 million a year earlier. Outstanding assessments on 30 April 2016 amounted to $93 million, with 52 Member States having paid their assessed contributions to both tribunals and the International Residual Mechanism in full, he said, adding that the final outcome for 2016 depended on Member States continuing to honour their obligations to the tribunals.
Turning to the Capital Master Plan, he said the bulk of assessed contributions had been received, with $200,000 outstanding from the assessed $1.87 billion special account. Thanking the 185 States that had fully paid their assessments, he urged the remaining seven Member States to follow suit as soon as possible so “we can make clean closure” of the accounts. The cash balance was currently positive after the General Assembly approved the financing of the final shortfall through the transfer of $154.9 million transfer from the General Fund, including a final $45 million — assessed in the context of the 2016 regular budget financing — transferred earlier this year.
The Committee will meet again on Friday, 6 May at 10 a.m. to fill a vacancy in the Committee on Contributions and to discuss the financing of active United Nations peacekeeping operations in Cyprus and Darfur, as well as missions being drawn down in Central African Republic and Chad, Timor-Leste and Syria.