Accurate Price Tag, Better Project Management to Prevent More Delays Needed, Speakers Stress as Budget Committee Tracks Progress in Implementing Umoja
Delegates Also Reject Advisory Committee’s Call to Withhold Funds, Revise Budget of Criminal Tribunals Residual Mechanism
The Fifth Committee (Administrative and Budgetary) today considered the ongoing implementation of the Umoja enterprise resource planning project throughout the Organization, with delegates calling for greater transparency about the real cost of an ambitious initiative that had slipped behind schedule and surpassed its original cost estimates.
An integrated suite of information technology applications, Umoja was designed to support finance and budget management, human resources management, supply chain management, central support services, and other corporate core functions. Available to more than 40,000 staff members throughout the United Nations, it had replaced more than 400 legacy systems, but its implementation was running five years late amid ever‑rising costs.
The representative of the United States said it was imperative that the Organization ensured Umoja continued to be a catalyst for business transformation beyond 2018. “Umoja is a necessary tool to address the UN’s complex global operations and it will help the UN be more accountable not only to Member States, but to people around the world that benefit from its operations,” she stated.
Singapore’s delegate acknowledged the “mixed history” of the Umoja project, adding that some issues still required urgent attention, including the need to eliminate cost overruns and improve project management to prevent further delays. Originally expected to be finished by 2012, the project’s completion date would now be revised yet again from the end of 2018 to 2019, he noted.
Moreover, the Secretary‑General’s request for the forthcoming biennium would bring the project’s overall total cost to almost $540 million — more than double the original estimate of $248 million, he noted, urging the Secretariat to provide a precise picture of Umoja’s total cost. “The ability to obtain accurate information on the implementation costs of the project is a reflection of the strength of its governance,” he said.
Ecuador’s representative, on behalf of the “Group of 77” developing countries and China, echoed that view, urging the Secretary‑General to strictly manage the project, take proactive measures to avoid any further delays and ensure Umoja remained on track. Noting that the Secretary‑General’s proposal would bring the overall project budget to nearly $543.9 million, up 17 per cent from the prior biennium approved budget, she questioned the rationale for such a substantial increase when there was insufficient transparency on total project costs.
The European Union’s representative conveyed the bloc’s strong support for Umoja and welcomed significant progress in address the issues it faced. The quality of data that would be available through Umoja Extension 2 offered great potential to assist the Secretariat and Member States in future decision‑making, he added.
“We all know that this project had a difficult start,” said Jan Beagle, Under‑Secretary‑General for Management, presenting the ninth progress report on Umoja’s implementation, adding however that significant progress had been made, with Umoja poised to be a very important enabler of the Secretary‑General’s management reforms. On this year’s introduction of Umoja Extension 2, she said the effort was not without surprises and challenges. Even the software vendor had acknowledged that the Organization’s requirements went beyond those of its other customers.
On resource requirements for the biennium 2018‑2019, she said they were estimated in the current report at $77.58 million, down from the estimated $77.8 million cited in the eighth progress report (document A/71/390). That amount would be financed 15 per cent from the regular budget, 62 per cent from the support account and 23 per cent from extra budgetary resources based on the cost sharing formula approved by the General Assembly. “We need the strong support of the General Assembly to leverage Umoja to modernize the UN’s business practices and to enhance transparency and accountability throughout the Organization,” she added.
Carlos Ruiz Massieu, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), said that the Secretary-General’s report failed to provide a detailed breakdown of expenditures incurred in 2016-2017 and that few details were provided on the proposed resource requirements of $81.9 million for 2018-2019, which included additional requirements of $77.6 million to be approved by the General Assembly. Therefore, the Advisory Committee was recommending that the Secretary General be asked for detailed information on the expenditures and proposed requirements for the project in his next progress report. Further, it recommended that the level of the additional proposed resources for 2018-2019 be reduced by 20 per cent, from $77.6 million to $62.1 million.
Anand M. Bajaj, Director of External Audit (India) and Chair of the Audit Operations Committee of the Board of Auditors, presented the Board’s sixth annual progress report on Umoja’s implementation, stating that out of 18 pending recommendations from the Board’s previous reports, four had been fully implemented, 12 were under implementation and two had not been implemented.
In other business, the Committee took up the Secretary‑General’s reports on financing for the International Tribunal for the Former Yugoslavia and the International Residual Mechanism for Criminal Tribunals. The representative of Ecuador, speaking for the “Group of 77” developing countries and China, focused her remarks on the Mechanism, expressing great concern about underutilization of its new purpose‑built facility in Arusha, Tanzania — a view shared by her counterpart from Angola, on behalf of the African Group. She also noted with concern the Secretary‑General’s decision to rely more heavily on the Mechanism’s branch in The Hague without proper justification.
Introducing the Secretary‑General’s reports on those two entities, Bettina Tucci Bartsiotas, Controller of the United Nations, said the anticipated final level of expenditure for the Tribunal totalled $105.8 million, an increase of $7.7 million due mainly to costs related to its planned closure in December 2017. For the Mechanism, the Secretary‑General was proposing $215.4 million gross for 2018‑2019, an increase of $80 million, due mainly to expanded judicial activity and a strengthening of the Mechanism’s fugitive tracking team. Mr. Ruiz, for the Advisory Committee, recommended that the General Assembly authorize $44 million to maintain the Mechanism during the first half of 2018 only, pending a revised budget proposal for 2018‑2019.
Meanwhile, Ecuador’s delegate, again on the Group of 77’s behalf, expressed the Group’s support for the Secretary‑General’s request for $668,500 in additional resources for the Intergovernmental Conference to adopt the Global Compact for Safe, Orderly and Regular Migration. Ms. Bartsiotas said the requirements related to holding the Conference in New York, with the Government of Morocco to defray additional costs if the Conference was held in that country on 10 and 11 December 2018. Mr. Ruiz said the Advisory Committee recommended reductions pertaining to webcasting services and a proposed position of Administrative Assistant.
The Fifth Committee will meet again on Wednesday, 20 December at 10 a.m. to take up, among other things, the Secretary‑General’s second performance report on the programme budget for the biennium 2016‑2017, as well as revised estimates resulting from resolutions and decisions adopted by the Human Rights Council.
Umoja Enterprise Resource Planning Project
JAN BEAGLE, Under‑Secretary‑General for Management, presented the ninth progress report on the enterprise resource planning project known as Umoja (document A/72/397), which she described as one of the Secretariat’s most important transformative projects. “We all know that this project had a difficult start,” she said, but significant progress had been made and it was gratifying to see Umoja become a part of much of the Secretariat’s daily routine as well as a very important enabler of the Secretary‑General’s management reforms. Speaking in more detail, she said that in the year since the last report, seven Umoja deployments of differing complexity had been successfully completed, including International Civil Service Commission (ICSC) compensation package changes, the financial statements module and phase 1 of supply chain management. The trend of reported problems and support requests meanwhile indicated that Umoja had stabilized.
Going forward, she said a strong and dedicated business transformation function was key to drive the refinement of business models and practices and to sustain Umoja benefits through a continuous improvement programme. Several challenges remained to be addressed, including a failure among users to fully leverage Umoja’s potential. On the introduction of Umoja Extension 2, she reported considerable progress in many areas, but the effort was not without surprises and challenges. Even the software vendor had acknowledged that the Organization’s requirements went beyond those of its other customers. All software would be developed, tested and deployed by the end of 2018, but to mitigate change management risks and costly post‑deployment support, some software would be deployed in phases in 2018 and 2019.
Turning to resource requirements for the biennium 2018‑2019, she said they were estimated in the current report at $77.58 million, down from the estimated $77.8 million cited in the eighth progress report (document A/71/390). That amount would be financed 15 per cent from the regular budget, 62 per cent from the support account and 23 per cent from extra‑budgetary resources based on the cost‑sharing formula approved by the General Assembly. She noted that the project had contained costs, reduced dependence on contractors and included an increase in younger staff members. It thus proposed abolishing 13 more senior posts (one at the D‑1 level, seven at the P‑5 level and five at the P‑4 level) while creating seven junior posts (three at the P‑3 level, three at the P‑2 level and one at the General Service‑PL level). Concluding, she said that Umoja had progressed well during the last year, with a sustainable platform being created to deliver on its potential to transform the Organization. “We need the strong support of the General Assembly to leverage Umoja to modernize the UN’s business practices and to enhance transparency and accountability throughout the Organization,” she said.
ANAND M. BAJAJ, Director of External Audit (India) and Chair of the Audit Operations Committee of the Board of Auditors, presented the Board’s sixth annual progress report on Umoja’s implementation (document A/72/157). He noted that Umoja Integration (Foundation and Extension 1 functionality) had been deployed to five clusters with over 40,000 users in more than 4,000 locations. However, 12 per cent of all Umoja users had received no training. Moreover, issues raised by cluster 3 and 4 entities were harmonized into 67 recommendations, but as of February 2017, 13 recommendations were still being implemented. Stabilization of business reporting also required attention, he said, noting that Umoja provided 172 standard corporate formatted and ad hoc reports, whereas power users had produced 2,753 reports.
He recalled that an external consultant had identified in 2015 operating model risks that must be addressed for Umoja’s benefits to be realized, but action on the consultant’s recommendations were still underway. In addition, the Umoja project team had not yet assessed the project’s total cost of ownership — the sum of direct and indirect costs — and that quantification of indirect costs, such as work time, was challenging, given that time sheets were not kept for Secretariat staff. He went on to state that a bottom‑up approach for quantifying Umoja benefits, to take effect from the biennium 2018‑2019 with the involvement of business process owners, was an improvement on the previous top‑down approach focused on Heads of Departments. Concluding, he said that out of 18 pending recommendations from the Board’s previous reports, four had been fully implemented, 12 were under implementation and two had not been implemented.
CARLOS RUIZ MASSIEU, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) introduced its related report (document A/72/7/Add. 31), noting that the activities proposed to be implemented during the reporting period had been delivered and welcoming the progress made towards completion of the full deployment of Umoja Foundation and Umoja Extension 1. The Advisory Committee reiterated that the implementation of the full scope of Umoja was necessary to realize the full benefits of the solution, as well as to protect the investment already made by Member States. Umoja Extension 2 comprised some of the more strategic functions, including planning and programming, budget formulation and supply chain management, he said, adding that it was the poor coverage of such functions under the previous systems that led to the decision to shift to an enterprise resource planning system.
The Advisory Committee noted that the timeline for the full deployment of Umoja Extension 2 would be extended into 2019, with completion of the design, build and test activities for all the projects in 2018, deployment of the solutions developed in 2018 and 2019 and stabilization of the system in 2019, he said. The Advisory Committee noted the comments of the Board of Auditors on the bottom‑up approach, as well as the Board’s recommendation that, in the future, new baseline information should be established on the basis of Umoja transaction/workflow timestamps. The information provided on project expenditures by project phase from 2008 to 2017 represented an improvement, although the detailed information requested on annual expenditures by category of expenditure and related outputs had still not been provided. The Advisory Committee recommended that the General Assembly ask the Secretary‑General to include updated and refined information on indirect cost of ownership in future progress reports.
The Advisory Committee was of the view that the report did not provide a detailed breakdown of expenditures incurred in 2016‑2017 and that few details were provided on the proposed resource requirements of $81.9 million for 2018‑2019, which included additional requirements of $77.6 million to be approved by the General Assembly, he said. Therefore, the Advisory Committee was recommending that the Secretary‑General be requested to provide detailed information on the expenditures and proposed requirements for the project in his next progress report. Further, it recommended that the level of the additional proposed resources for 2018‑2019 be reduced by 20 per cent, from $77.6 million to $62.1 million.
LOURDES PEREIRA SOTOMAYOR (Ecuador), speaking on behalf of the “Group of 77” developing countries and China, reaffirmed the Group’s support for Umoja and noted the progress made in its deployment. However, it was concerned that 12 per cent of Umoja users had received no training. Moreover, an online user satisfactory survey indicated that 44 per cent of respondents could not understand Umoja despite training. The Group trusted that the Administration would correct such weaknesses and deficiencies, and that implemented functionalities would be fully utilized. The Group was also seriously concerned by the Secretariat’s proposal to extend the timeline for full implementation of Umoja Extension 2 into 2019. Recalling that the project originally was supposed to be deployed by the end of 2012, she urged the Secretary‑General to strictly manage the project, take proactive measures to avoid any further delays and ensure it remained on track.
Noting that a software upgrade must be implemented by 2020 to ensure continued support by Umoja’s vendor SAP and improve the employee self‑service function, she emphasized the need for effective project planning and management to avoid disruption and delay. The Group agreed with the Advisory Committee that a revised Umoja business case should reflect actual efficiencies and benefits achieved. It noted efforts to improve training as well as efforts to estimate, for the first time, the indirect cost of the project as well as the total cost of ownership. It remained disappointed, however, that little progress had been made towards a detailed accounting of indirect project costs absorbed by departments, as requested by the General Assembly, or to conduct an analysis of the total cost of ownership, which was crucial for informed Assembly decision‑making. Regardless of where Umoja costs were budgeted, they should be included in the project budget and reflected in the analysis to total costs of ownership, she said, emphasizing the importance of project governance and a complete, transparent and holistic accounting of resources committed by Member States.
Turning to resource requirements, she noted that the Secretary‑General’s proposal would bring the overall project budget to nearly $543.9 million, an increase of 17 per cent over the prior biennium approved budget. The Group questioned the rationale for such a substantial increase when there was insufficient transparency on total project costs and when the business case for Umoja did not reflect a list of actual efficiencies and benefits.
THOMAS HYNDRAK, European Union, said that the bloc continued to strongly support implementation of Umoja and welcomed the significant progress achieved in addressing the issues faced by the project, including continued improvements in project management and efforts to quantify the total cost of ownership as well as improve the presentation of quantitative and qualitative benefits. The European Union attached great importance to the full implementation of Umoja Extension 2, which included some of the most important and promising functionality, including enhancement to supply chain management, budget formulation, programme management, conference and event management and force planning. The quality of data that would be available through Umoja Extension 2 offered great potential to assist the Secretariat and Member States in future decision‑making.
MOHAMED RIZAL (Singapore), associating himself with the Group of 77 and China, noted the steady decline in Umoja‑related incidents from more than 4,000 in November 2016 to 1,200 in July 2017, encouraging the Secretariat to build on that momentum. However, he also acknowledged the “mixed history of this project” and that some issues still required urgent attention. In that context, he recalled that the General Assembly had reiterated the need for the Secretariat to eliminate cost overruns and improve project management to prevent further delays. While it had originally proposed that the project would be completed by 2012, its completion date would now be revised yet again from the end of 2018 to 2019. Moreover, the Secretary‑General’s request for the forthcoming biennium would bring the project’s overall total cost to almost $540 million — more than double the original estimate of $248 million. His delegation urged the Secretariat to provide an accurate picture of Umoja’s total cost, adding that “the ability to obtain accurate information on the implementation costs of the project is a reflection of the strength of its governance.”
CHERITH NORMAN‑CHALET (United States) noted that Umoja was a complete reworking of the way the Secretariat managed its administration, in both business processes and information technology solutions. The software replaced over 400 legacy systems used to manage procurement, accounting, payroll and logistics, and in that context, the United States viewed Umoja as an integral part of the management reform platform. Her delegation commended the work thus far to reduce the operational costs of the project and efforts to achieve both the quantitative and qualitative benefits outlined in the progress report. “But the work is not done and we must continue to ensure these objectives are achieved,” she warned.
Noting the implementation of the full scope of Umoja was scheduled for December 2018, her delegation recognized the continued need for strong risk management as well as a highly skilled workforce through clear and advanced technical training, she said. It was imperative that the Organization ensured Umoja continued to be a catalyst for business transformation beyond 2018, she said, emphasizing that special attention was needed on implementing a smooth transition from Umoja deployment to post‑implementation operations after 2018. “Umoja is a necessary tool to address the UN’s complex global operations and it will help the UN be more accountable not only to Member States, but to people around the world that benefit from its operations,” she said.
Modalities for Intergovernmental Conference on Global Migration Compact
BETTINA TUCCI BARTSIOTAS, Assistant Secretary‑General and Controller of the United Nations, introduced Secretary‑General’s statement (document A/C.5/72/17) on the programme budget implications of draft resolution A/72/L.9 on the Modalities for the Intergovernmental Conference to adopt the Global Compact for Safe, Orderly and Regular Migration. To provide appropriate support to the intergovernmental conference, the Secretary‑General proposed additional resources of $668,500, for the provision of general temporary assistance, meeting servicing, documentation and for public information. That amount would be reflected under section 1, Overall policymaking, direction and coordination, section 2, General Assembly and Economic and Social Council affairs and conference management, and section 28, Public information of the proposed 2018‑2019 programme budget and charged against the contingency fund. The additional resource requirements related to holding the conference in New York, she noted, adding that if it was decided to hold the conference in Morocco, the Government of that country would need to defray the additional costs.
Mr. RUIZ, introducing the Advisory Committee’s corresponding report (document A/72/7/Add.34), recommended reductions pertaining to webcasting services and the proposed Administrative Assistant position, for which the Advisory Committee recommended application of a higher vacancy rate.
Ms. PEREIRA (Ecuador), speaking for the Group of 77 and China, recalled paragraph 5 of the General Assembly resolution 40/243 (1985), by which it had decided that United Nations bodies could hold sessions away from established headquarters when a Government issuing the invitation for the session to be held in its territory had agreed, after consulting with the Secretary‑General, to defray actual additional costs involved. In that context, the Group congratulated Morocco for agreeing to host the Intergovernmental Conference on 10 and 11 December 2018 and also welcomed the Secretariat’s support, the United Nations system’s cooperation as well as synergies derived from facilitating inter‑agency cooperation for effectiveness and efficiency. Considering the subject matter’s importance, the Group supported the request for additional appropriation, because making the required resources available, while taking the Advisory Committee’s recommendations into account, would guarantee a balanced approach to the Intergovernmental Conference’s funding.
Financing for Former Yugoslavia Tribunal and Residual Mechanism
Ms. BARTSIOTAS then introduced the Secretary‑General’s report on the second performance report on the budget of the International Tribunal for the Former Yugoslavia for biennium 2016‑2017 (document A/72/603). She said that the anticipated final level of expenditure totalled $105.8 million, up $7.7 million resulting from increases related to post and non‑post resources mainly due to the planned closure of the Tribunal in December 2017, including end‑of‑service payments such as repatriation grant and travel, annual leave commutation and termination indemnity. The anticipated final level of income for the biennium 2016‑2017 amounted to $12.6 million, reflecting an increase of $104 million. Consequently, the combined effect of the anticipated final level of expenditure and income amounted to an increase of $6.3 million.
She then presented the Secretary‑General’s report on the second performance report on the budget of the International Residual Mechanism for Criminal Tribunals for the biennium 2016‑2017 (document A/72/604) and the Secretary‑General’s report on the budget for the International Residual Mechanism for Criminal Tribunals for the biennium 2018‑2019 (document A/72/396/Corr.1). The anticipated final level of expenditure for the Mechanism for 2016‑2017 amounted to $132 million, reflecting a decrease of $3.8 million, resulting from the strengthening of the dollar against the euro and the Tanzania shilling, lower inflation and decreases related to post and non‑post resources. The report contained the proposed resource requirements for the Mechanism for 2018‑2019, amounting to $215.4 million gross, reflecting an increase of $80 million. The proposed budget included a total of 176 posts and other staffing requirements for ad hoc functions for 2018‑2019. The increase was mainly due to the expanded judicial activity, which represented the highest level of such activity in the Mechanism since its establishment, as well as to the provision of administration services by the Mechanism itself and the proposed temporary strengthening and refocusing of the fugitives tracking team.
Mr. RUIZ then introduced the related ACABQ report (document A/72/654), noting that the Former Yugoslavia Tribunal was scheduled to close on 31 December 2017. In that connection, the Advisory Committee considered that the significant increase in requirements would, from an administrative and budgetary perspective, defeat the purpose of the decision to close the Tribunal and replace it with a Residual Mechanism. Given that 2018‑2019 would be the first budget period during which the Mechanism would fully absorb the residual work of the international tribunals, the resource requirements for the biennium could be considered as the baseline for the Mechanism going forward. The Advisory Committee did not consider those requirements to have been fully justified and recommended that the General Assembly authorize the Secretary‑General to enter into commitments of approximately $44 million for the maintenance of the Mechanism during the first half of 2018 only, and to submit a revised budget proposal for 2018‑2019. The recommended amount of the commitment authority was equal to one quarter of the appropriation for 2016‑2017 and one eighth of the proposed increase in requirements for 2017‑2018.
Ms. PEREIRA (Ecuador), speaking for the Group of 77 and China, noted that the Mechanism’s savings could be attributed to the Tanzanian shilling’s strengthening, a decrease in inflation as well as the absence of trials during 2016‑2017. The Group noted with concern the Secretary‑General’s decision to rely more heavily on The Hague branch without proper justification. To a large extent that had defeated the purpose of closing the Former Yugoslavia Tribunal and replacing it with the Mechanism, and the Group would examine the circumstances leading to the decision during informal discussions.
She went on to express great concern about the underutilization of the new purpose‑built facility for the Mechanism, recently completed in Arusha, noting that staff from The Hague branch were housed in rental premises. As such, she requested the Secretary‑General to address that issue during the current budget period and in the context of management reforms. She also expressed concern about the Advisory Committee’s recommendation requesting the Secretary‑General to submit a revised budget and recommending against giving him the required resources. That would keep the Mechanism from implementing its programmes in a timely fashion, she warned, calling for the provision of the supplementary information required. The Group did support the ACABQ’s recommendation to retain the post of the Prosecutor Under‑Secretary‑General and Special Assistant P4 at the Arusha branch, as opposed to moving them to The Hague without adequate justification.
MÁRCIO BURITY (Angola), speaking on behalf of the African Group and associating himself with the Group of 77 and China, expressed concern over the continued reliance on the branch in The Hague without proper justification, which included the proposed movement of staff to a more expensive duty station, ignoring the availability of a new building in Arusha which had yet to be fully utilized. Doing so defeated the purpose of closing the Tribunal and replacing it with the Residual Mechanism. The African Group rejected the Advisory Committee’s recommendation that requested the Secretary‑General to submit a revised budget proposal and believed that the decision to withhold the planned resources would jeopardize the timely implementation of the programmes of the Mechanisms. Alternatively, the Group proposed that the revised information be provided as supplementary information.