Secretary-General’s Proposal Lacks Strategic Depth, Clarity on Estimated Costs, Delegates Say as Fifth Committee Examines 2018-2019 Budget Outline
Delegates in the Fifth Committee (Administrative and Budgetary) today criticized the Secretary-General’s budget outline for the biennium 2018‑2019 for what they viewed as a lack of strategic depth and clarity on estimated costs for several initiatives that had yet to be considered by the General Assembly.
Bettina Tucci Bartsiotas, Assistant Secretary-General and Controller, presenting the Secretary-General’s proposed programme budget outline, said it represented his vision of “doing more with less” and improving mandate delivery. While the preliminary $5.4 billion estimate was $21.2 million higher than the 2016‑2017 figure — due mainly to initiatives currently being considered by the General Assembly — the budget outline was $259 million less than the nearly $5.7 billion spent in 2014‑2015. Initiatives currently before the Assembly and foreseeable items could revise the budget by an estimated $86.9 million, she cautioned.
Carlos Ruiz Massieu, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), questioning whether the estimate’s aggregate amount included initiatives or activities that the Assembly had yet to consider, stressed that the budget outline should clearly distinguish between estimates for established activities and those for initiatives to be considered. He did not agree that consolidating the programme budget implications into one report for review by the Advisory Committee would yield significant benefits.
In the ensuing dialogue, Thailand’s representative, on behalf of the “Group of 77” developing countries and China, said estimates for the Umoja management project were one of such areas that could be affected by the Assembly’s consideration. It was thus inappropriate to accept any decreases attributed to that system in the budget outline. She also expressed concern over the proposed resource reductions as they did not represent efficiencies, but rather reductions of achievable targets with no clear explanation on how they would otherwise be completed.
More broadly, the European Union’s delegate said the incremental way in which budgets were compiled was “by far” the most serious concern. The methodology used to build the outline had not been explained; the figures were confusing and sometimes contradictory, the overall approach lacked strategic depth and it was unclear what items were included in the outline and what must be added. He expressed further disappointment about the limited benefits from the Umoja project and requested clarity on those expected in 2019.
Japan’s delegate likewise stressed the need to go beyond incremental budgeting, pointing out that his Government and other Member States had repeatedly objected to the practice of merely extending the current budget for the next biennium. He expressed regret that the budget outline had been introduced so late in the session
Switzerland’s delegate, also speaking for Liechtenstein, said that by the time resources were allocated and the budget was approved, programme plans often were outdated. Further, there was no link between resource allocation and past performance. Rather than guiding the United Nations’ strategy, Member States were “embroiled in micro-management of allocating resources to the extent that they authorize the creation and abolishment of individual posts,” she said.
“We must reform the budget process,” said the United States delegate, by scrutinizing core cost drivers, such as staff costs, reviewing mandates and seeking opportunities to reduce duplication. She was concerned by the process of assessing programme budget implications, as substantive bodies were routinely forced to operate in a financial vacuum without information on the financial implications of their decisions.
The Russian Federation’s representative said he could not agree on an appropriation for initiatives that had not been approved by intergovernmental United Nations bodies. He agreed with the Advisory Committee that needs and resources for non-approved mandates should be shown separately.
Also today, delegates considered revised estimates in the 2016‑2017 programme budget related to the International Court of Justice, contained in a report by the Secretary-General presented by Ms. Bartsiotas. She said two independent experts had been appointed by the Court President, while the Registry had taken the necessary steps for secretarial arrangements and organization of their mission. She proposed that the estimated $170,000 required for those needs be met through the $50,000 already provided by the Secretary-General for unforeseen expenses for 2016‑2017, along with $120,000 requested in the present revised estimate.
On that point, Thailand’s representative, again speaking for the Group of 77, said that bearing in mind the lack of extra-budgetary resources available for the Court and the overall 10 per cent resource reduction in 2016‑2017, it was essential to give the Court adequate resources to discharge its mandate.
The Fifth Committee will reconvene at 10 a.m., on Monday, 5 December, to discuss implementation of the enterprise resource planning project.
Proposed programme budget outline for the biennium 2018‑2019
BETTINA TUCCI BARTSIOTAS, Assistant Secretary-General, Controller, introduced the Secretary-General’s report titled “Proposed Programme Budget Outline for the Biennium 2018‑2019” (document A/71/428). Once approved by the General Assembly, she said, the budget outline would serve as the basis for the Secretary-General’s proposed programme budget for 2018‑2019. “The proposal continues to reflect the Secretary-General’s vision of strict budgetary discipline, doing more with less, and to find new and better ways of delivery on our mandates,” she said. The preliminary budget estimate of just over $5.4 billion reflected an increase of $21.2 million on the current appropriation for 2016‑2017, she noted, and that was primarily due to forthcoming initiatives being considered at the current Assembly session. When compared against the final expenditures of just under $5.7 billion for 2014‑2015, the outline reflected a decrease of $259 million. It also continued to reflect the eight priorities proposed for the work of the Organization, in line with resolution 71/6.
The starting point for the preliminary estimate was the appropriations currently approved for 2016‑2017, she said. In addition, the delayed impact of 70 posts established in 2016‑2017 would require an additional $11 million, which would be partially offset by a $2.5 million reduction for posts abolished during that same time period. Also, one-time costs amounting to $79 million for 2017‑2018 had been removed. New mandates and initiatives, such as the implementation of the policy on human rights screening of United Nations personnel, the strengthening of security and safety requirements for United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) and the occupational safety and health programme, required an additional $4.9 million.
She underscored that the proposal for special political missions was to maintain the current level of the appropriations at $1.124 billion. On Monday, the recommended resource requirements for the United Nations Mission in Colombia for 2017 had been issued, which would increase the proposal for special political missions by $128.3 million.
Initiatives currently before the General Assembly and foreseeable items that were yet to be issued might impact the budget outline, she said, noting information on that matter was included in Annex II. The estimated amount known at the time of the preparation of the report was $86.9 million. Annex II of the report included reductions of $27.8 million related to benefits realization of Umoja, the Organization’s enterprise resource planning project. The Secretary-General and senior management remained committed to realizing the qualitative and quantitative cumulative benefits in the overall range of $140‑$220 million by 2019. As conveyed in the eighth progress report on the Umoja project, the cumulative benefits by the end of 2019 would have reached $163.7 million. She added that the preliminary estimate since the issuance of the Secretary-General’s report stood at $5.58 billion, which was still below the final expenditure level of 2014‑2015. An updated Annex II would be made available to the Fifth Committee during its informal consultations on that item.
In terms of a proposal for the consolidation of programme budget implications, the budget outline contained a proposal to submit one report that consolidated those that were tabled during the main session of the Assembly, for review by the Advisory Committee on Administrative and Budgetary Questions (ACABQ) and the Fifth Committees. The proposal would be implemented on an experimental basis for the forthcoming 2018‑2019 biennium, and a review would be presented to the Assembly in the context of the proposed programme budget outline report for the biennium 2020‑2021, with a view to making a decision on its continuation.
CARLOS RUIZ MASSIEU, Chair of the ACABQ, introducing its eponymous report (document A/71/428), said the Advisory Committee questioned whether the aggregate amount of the preliminary estimate included initiatives or activities not yet considered by the General Assembly. The budget outline document should clearly distinguish between two parts. Part One should only cover estimates for established activities and Part Two should only cover estimates for activities or initiatives that had yet to be considered by the General Assembly. Regarding the proposal to consolidate the statements on programme budget implications of all draft resolutions recommended by the Assembly’s Main Committees and to submit one report for review by the ACABQ and Assembly by 1 December, he said the ACABQ was not convinced that the approach would yield significant concrete benefits. Therefore, it recommended against the proposal.
SIRITHON WAIRATPANIJ (Thailand), speaking on behalf of the “Group of 77” developing countries and China, said a number of activities were still under consideration which could result in an increase in the 2018‑2019 programme budget. She requested that any updates to the budget be provided at the earliest date so as to conclude that agenda item on time. Meanwhile, preliminary estimates for special political missions ‑ representing more than 20 per cent of total budget resources ‑ remained a concern. A growing proportion of the regular budget was devoted to peace and security activities and that could adversely impact funding of the Organization’s development activities. In particular, such a trend could hinder the delivery of the 2030 Agenda for Sustainable Development and the Addis Ababa Action Agenda.
Concerning the realization of projected Umoja benefits, resource estimates could be impacted as a result of the Assembly’s consideration of that issue, she said. Thus, it was inappropriate to accept the decreases attributed to the new Umoja system in the budget outline. She also expressed concern over the proposed reductions of resource levels, as they did not represent efficiencies, but rather reductions of achievable targets with no clear explanation on how they would otherwise be completed. At the same time, she did not agree with the proposed consolidation of statements on programme budget implications of draft resolutions. That endeavour would unnecessarily delay the work of the Assembly while bringing no tangible benefit to the Fifth Committee.
ALEXANDRA BAUMANN (Switzerland), also speaking on behalf of Liechtenstein, said that the current system of budgeting and planning within the United Nations was dysfunctional and needed reform. The current budget cycle spanned five years, notwithstanding that the regular budget was a biennial budget. The Organization’s programme plans were approved separately from the regular budget. When resources were allocated and the budget was approved, the programme plans were often outdated. As programme performance and financial performance were not considered concurrently, there was no link between the allocation of resources and past performance. “As a result, instead of being able to strive for clear future results and guide the Organization’s strategic orientation in an informed way, Member States are embroiled in micro-management of allocating resources to the extent that they authorize the creation and abolishment of individual posts,” she said.
Based on existing resources, the Organization could more effectively achieve its mandated peace and security objectives, she said. Preventing conflict was better and less expensive than curing it. Yet, while peacekeeping received the bulk of assessed contributions, few resources were invested in mediation and the prevention of conflict. The Organization’s work in that area must be strengthened. As peace, security and human rights were linked, it was also necessary to ensure that the human rights pillar received the necessary resources from the regular budget to fund all mandated activities.
JAN DE PRETER, European Union, said discussion of the budget outline was an opportunity to demonstrate an approach built on real understanding of the costs of delivering mandates. However, the proposal showed only a list of additions to the current budget. Reprioritization and review of existing structures should be at the centre of each new budget cycle, especially now with so many new initiatives in place, he said, calling the 2030 Agenda and Umoja landmark reforms. The budget must be based on a proper evaluation of what was actually necessary to carry out mandated activities. The incremental way in which budgets were compiled was “by far” the most serious concern and he shared ACABQ’s view about the proposal. The methodology used to build the outline was not explained; the figures were confusing and sometimes contradictory, the overall approach lacked strategic depth, and it was unclear what items were included in the outline and what must be added. He was confused by the “To be Determined” lines in Annex 2 and would use informal consultations to seek clarity.
He expressed further disappointment about the limited benefits from implementation of Umoja and requested clarity on the benefits expected by the end of 2019, calling the status of the Global Service Delivery Model confusing. The United Nations must intensify efforts to innovate and improve work practices, and the Secretary-General’s leadership would be vital in that regard. Also, the Secretariat should prudently manage inflationary pressures, such as those arising from exchange rate and inflation fluctuations. The Union would continue to scrutinize the re‑costing practice and methodology and to question the use of the contingency fund, as no reprioritization took place and no mandate implementation was ever deferred to the next biennium, even if the fund’s use had reached its limits. A budget outline should be a modern management tool to help maintain discipline and enhance flexibility and capacity to re-prioritize new and emerging needs while ensuring financial predictability. He expressed strong concern that the proposal was neither designed nor used for that purpose and, consequently, the Organization struggled to finance new priorities.
NOBUKO IWATANI (Japan) expressed his regret that the proposed budget outline was being introduced so late in the Committee’s current session, as it left very little time to finish work on that matter. Member States, including his delegation, had repeatedly expressed their concerns about the practice of merely extending the current budget for the next biennium, and had additionally stated the need to go beyond incremental budgeting. The proposed budget seemed unchanged in both methodology and format, he said, and he shared the concern raised by the ACABQ regarding the need to distinguish between estimates in support of mandated activities from estimates related to other activities or initiatives that had yet to be considered by the Assembly. He took note of the benefit of Umoja that was reflected in the preliminary estimate for 2018‑2019, and underscored that he wished to see more initiatives to seek further efficiencies and savings. In that regard, he said he would pay particularly close attention to the consideration of items related to management reforms. He backed the Advisory Committee’s rejection of the proposal to consolidate statements on programme budget implications, as it lacked concrete merit. Strict adherence to existing rules and the timely submission of documents would better serve Member States’ purposes.
CHERITH A. NORMAN CHALET (United States), regarding the 2018‑2019 budget outline, expressed disappointment by what appeared to be a standard practice of simply beginning the process with the current biennium’s initial approved budget with the expectation that additional requirements simply would be “tacked on” to the existing level. There appeared to be no process whereby the previous budget was reviewed with a fresh look at how mandates could be delivered more cost-effectively. “We must reform the budget process,” she said, by scrutinizing core cost drivers, such as staff costs, reviewing mandates and seeking opportunities to reduce duplication and redundancies. She urged capitalizing on forthcoming savings from Umoja and the International Public Sector Accounting Standards. She expressed concern over the programme budget implication process, as substantive bodies were routinely forced to operate in a financial vacuum without information on the financial implications of their decisions. They should be given financial information at the earliest stages of negotiations.
SERGEY KHALIZOV (Russian Federation), recalling that total appropriations had come to $5.43 billion, a slight increase over the current budgetary period, said a final decision must be taken based on a realistic needs analysis. He did not object to the proposal to establish the amount of the reserve contingency fund at 0.75 per cent of the total budget. However, he could not agree on the inclusion in the estimate for the biennium of an appropriation for initiatives that had not been approved by intergovernmental United Nations bodies. He agreed with the Advisory Committee that needs and resources for non-approved mandates should be shown separately. ACABQ had stated that there was not a justification for spending on special political missions. That spending — about one quarter of the regular budget — required close consideration. Future estimates must consider the Advisory Committee’s recommendations on new compensation packages for United Nations personnel and on the benefits and disadvantages of Umoja. The Russian Federation was ready to discuss those issues during informal consultations.
2016-2017 Budget Revised Estimates: International Court of Justice
BETTINA TUCCI BARTSIOTAS, Assistant Secretary-General, Controller, introduced the Secretary-General’s report titled “Revised estimates relating to the programme budget for the biennium 2016‑2017 under section 7, International Court of Justice” (document A/71/560). She said that the Court had arranged for an expert opinion in the case of the maritime delimitation in the Caribbean Sea and the Pacific Ocean between Costa Rica and Nicaragua. Two independent experts had been appointed by the President of the Court and the Registry had taken the necessary steps in terms of secretarial arrangements and the practical organization of their mission. The estimated requirements to carry out that Court’s order totalled $170,000. It was proposed that those be met by $50,000 that had already been provided by the Secretary-General in accordance with Assembly resolution 70/250 on unforeseen and extraordinary expenses for 2016‑2017, and $120,000 that was requested in the present revised estimates under section 7. Those resources would provide for payment for the fees of the experts, travel costs for on-site visits, consultations with Court members, attendance at Court hearings, and travel costs for two Registry officials.
Mr. RUIZ, Chair of the ACABQ, introduced that Committee’s eponymous report (document A/71/635). The Advisory Committee had been informed that the proposed requirements of $120,000 requested in the present revised estimates under section 7 included $20,000 to cover the costs of the registry staff member missions. The ACABQ believed the expenses should be absorbed by the budget of the Court in the initial appropriation for 2016‑2017. The Advisory Committee therefore recommended that the Assembly authorize the Secretary-General to enter into commitments in the amount of $100,000 to provide for the Court in 2016‑2017 in the matter at hand.
DHISADEE CHAMLONGRASDR (Thailand), speaking on behalf of the Group of 77, said resources to be approved by the Assembly must be commensurate with all mandated programmes and activities. Given the unpredictable nature of the Court's workload, due regard should be given to an assessment of the estimated requirements for each biennium and adequate resources appropriated. The Group noted the additional $120,000 required for the case between Costa Rica and Nicaragua and recognized that the appointment of experts was a sovereign decision taken by the Court. Bearing in mind the lack of availability of extra-budgetary resources for the Court and the overall 10 per cent resource reduction in 2016‑2017, it was essential to give the Court adequate resources to discharge its mandate. The Group supported the Secretary-General’s request for the approval and appropriation of $120,000 in additional resources, which would account for all spending required for the completion of that case.