United Nations Financial Situation ‘Generally Sound and Positive’, Top Management Official Tells Budget Committee
Annual Report of United Nations Office for Partnerships Also Introduced
The Organization’s financial indicators for 2016 remained “generally sound and positive” except for the empty cash position of the regular budget and an accompanying reserve fund that was nearly exhausted, a United Nations senior management official told the Fifth Committee (Administrative and Budgetary) today.
Bettina Tucci Bartsiotas, Assistant Secretary-General, Controller, laid out the Organization’s four main financial categories - the regular budget, peacekeeping operations, international tribunals and the Capital Master Plan – for the Fifth Committee delegates. “Cash positions are currently positive for all categories. Regular budget cash is at very low levels and regular budget reserves (Working Capital Fund and the Special Account) are almost exhausted,” Ms. Bartsiotas said. “More severe cash problems will be experienced in the final months of 2016 unless sufficient contributions are received.”
Also during the meeting, the Secretary-General’s annual report on the activities of the United Nations Office for Partnerships, contained in document A/71/159, was introduced.
In a year in which new rates of assessment were used to calculate Member States contributions, the unpaid regular budget assessments tallied nearly $1.2 billion as of 30 September 2016, $136 million more than the level outstanding as of 2 October 2015. Total assessments for 2016 were $2.55 billion, $222 million less than the $2.77 billion assessed in 2015. She thanked the 126 Member States which had already paid in full for the regular budget as of September’s end, two less than the 128 Member States which had paid this budget category in full on 2 October 2015 and 16 less than the 142 Member States that had paid in full by year’s end 2015.
Ms. Bartsiotas urged the remaining 67 Member States to pay their regular budget contributions in full as soon as possible, noting the $1.19 billion in unpaid assessments were concentrated among a few Member States. [Chart 6, part of the Secretariat’s presentation to the Fifth Committee, showed the United States was responsible for $786 million of the funding gap; followed by Brazil with $219 million unpaid; and Venezuela at $31 million.] ”The final financial picture for 2016 will largely depend on the action taken by these Member States in the coming months,” she added.
Ms. Bartsiotas said cash balances were positive for peacekeeping operations and the tribunals. As a result of the Secretariat making every effort to process payments to countries which had contributed troops and equipment to the peacekeeping missions, the Secretariat expected a decrease in the year-end level of outstanding payments to Member States, she said.
Laying out the details of the regular budget’s financial difficulties, Ms. Bartsiotas said the cash shortfall tallied $344 million on 30 September 2016. The shortfall was covered by $150 million from the Working Capital Fund and $201 million from the Special Account. Taking account of reserves, this left $7 million cash available in the Combined General Fund as of September’s end. “This level of reserves (both Working Capital Fund and Special Account] is sufficient to cover only six weeks of regular budget operations,” said Ms. Bartsiotas, adding it would be prudent to review the adequacy of the reserve level “in light of the pattern of payments of Member States and the level of commitment authority.”
When briefing the Fifth Committee on the Organization’s financial situation in May, Secretariat officials had noted that the regular budget would be squeezed as the year went on and greater cash shortfalls were experienced in July, August and September.
Yet despite the liquidity problems the Organization faced for the regular budget, she said, that as noted in Volume 1 of the Board of Auditors report, “the financial health of the UN as a whole remains sound as it has sufficient assets overall to meet both short-term and longer-term liabilities”.
Ms. Bartsiotas pointed to the increasing shortfalls in the Organization’s regular budget: $31 million as of 31 December 2013; $81 million at the end of December 2014; and $217 million at the end of December 2015.
Regarding peacekeeping operations, Ms. Bartsiotas said the shifting demand for peacekeeping activities made it difficult to predict the missions’ financial needs. In addition, peacekeeping activities ran along a different financial period, from 1 July to 30 June, rather than during the regular budget’s calendar year and the mission assessments, based on each particular scale of assessment period, were issued separately for each operation. And since assessment letters could only be issued through the mandate period approved by the Security Council for each mission, the letters were issued for different periods throughout the year. All of these factors made a comparison between peacekeeping operations and the regular budget complicated, she said.
The total amount of unpaid peacekeeping assessments, as of 30 September 2016, was about $2.3 billion. The Organization’s assessments for peacekeeping operations between January and September 2016 totalled $10.3 billion and payments received during that nine-month period tallied $8.9 billion.
As of 30 September 2016, 25 Member States had paid their peacekeeping assessments in full. According to Chart 11 of the presentation, the United States owed the largest amount of peacekeeping assessments with $509 million, followed by Brazil at $198 million, and Italy at $182 million.
The total cash available for peacekeeping operations as of 30 September 2016 was $5 billion, which included the Peacekeeping Reserve account. The largest amount — $4.7 billion — was earmarked for active missions; followed by $198 million for closed missions; and $139 million in the Peacekeeping Reserve Fund.
Regarding outstanding payments to Member States, the Secretariat was making every effort to minimize the level, which totalled $824 million at the end of 2015 and was expected to drop to $713 million by the end of 2016. As of 30 September 2016, the Organization owed $126 million to Member States for troops and formed police units and regarding contingent-owned equipment claims, $376 million was owed to active missions and $86 million to closed missions. That equalled a total of $588 million in outstanding payments to Member States at the end of September. [According to Chart 14, the outstanding payment figure would jump to $713 million at year-end 2016, with $254 million being owed for troops and formed police units; $373 million for contingent-owned equipment claims to active missions; and $86 million for equipment claims to closed missions.]
Turning to the financial conditions of the two International Criminal Tribunals — the International Tribunal for the Former Yugoslavia and the International Criminal Tribunal for Rwanda — and the International Residual Mechanism, Ms. Bartsiotas called their overall financial positions generally sound this year. Their final financial positions would depend on actions taken by the 92 Member States with unpaid tribunal assessments. As of 30 September 2016, unpaid assessments for the tribunals tallied $55 million, about $14 million less that the amount outstanding on 2 October 2015.
[According to Chart 19 of the Secretariat’s presentation, the United States led the list of 92 Member States which had not paid their tribunal assessments with $21 million outstanding; followed by the Russian Federation with $12 million outstanding and Brazil with $10 million.]
By the end of September 2016, 101 Member States had fully paid their assessed contributions to both tribunals and the International Residual Mechanism, seven more than in 2015. Those assessed contributions totalled $77 million.
Turning to the Capital Master Plan, Ms. Bartsiotas said the bulk of the $1.87 billion assessed under the Plan’s special account had been received. A total of $49,716 remained outstanding from four Member States. The costs had been distributed among 192 Member States at the time of the Plan’s financing, she added.
The Committee then heard from Ann de la Roche, Officer-in-Charge of the United Nations Office for Partnerships, who presented the Secretary-General’s report on the activities of her Office in 2015. The Partnership’s Office aimed to serve as a gateway for public-private partnerships to achieve the Sustainable Development Goals and comprised the United Nations Fund for International Partnerships and the United Nations Democracy Fund.
Resources allocated to the Fund for International Partnerships had reached $1.4 billion by the end of 2015, she said, providing the United Nations Foundation capital to initiate programmes involving women’s and girl’s empowerment, polio eradication, suppression of malaria and addressing global energy and sustainability issues, she said. By the end of 2015, the total number of programmes supported by that specific fund had stood at 592 projects, implemented by 43 United Nations entities in 124 countries.
During that same year, the Democracy Fund had on its end backed 51 new projects at a total cost of $9 million, providing support to primarily civil society organizations in countries undergoing various phases of democratization, she said. Since its inception in 2005, the Fund had supported nearly 600 projects in over 130 countries.
After the presentation, the Committee approved an oral draft decision recommending the General Assembly to take note of the annual report.
The Fifth Committee will reconvene at 10 a.m. Tuesday, 11 October, to discuss administration of justice and human resource management.