Concerns Aired about Delays across United Nations System in Carrying Out Compliance, Performance Recommendations, as Fifth Committee Reviews Board of Auditors Reports
While pleased with the Board of Auditor’s precise review of the overall healthy financial statements of 18 United nations entities, several delegates today in the Fifth Committee (Administrative and Budgetary) were troubled by what they viewed as some of these same entities’ lax attitude in carrying out the auditing watchdog’s recommendations.
The observer for the State of Palestine, speaking for the “Group of 77” developing countries and China, said the Group is uneasy with the deteriorating rate of implementation of Board recommendations. The rate stood at 41 per cent in 2018, a substantial drop from the already insufficient 48 per cent in 2017, he said.
The European Union’s delegate also expressed concern that some United Nations organizations and entities are rejecting the Board’s recommendations or delaying their implementation. The Union intends to investigate the situation in detail during informal meetings. He commended the Board’s reports for providing accountability to Member States, and their taxpayers, and said its work is a crucial component of the United Nations system’s oversight framework.
The representative of the Russian Federation said he values the Board’s work and urged it to carry out an analysis of the regular budget, peacekeeping and tribunals and provide information about their general ratio solvency trends.
Peter Korn, Director of External Audit of Germany and Chair of the Audit Operations Committee of the Board of Auditors, introduced the Board’s financial reports for the year ended 31 December 2018 and a Secretary-General note that provides a concise summary report. The document details the key issues found in the audits of the 18 entities, which includes 16 agencies, programmes and funds; United Nations peacekeeping operations; and the United Nations Joint Staff Pension Fund.
In general, Mr. Korn said, the financial position of all entities remains strong or at least sufficient. The Board notes the low liquidity in the regular budget during 2018 and that funds borrowed from the Working Capital Fund in 2017 could not be repaid in 2018. Funds borrowed from the United Nations Special Account and from closed peacekeeping missions were used to cover temporary liquidity mismatches.
Johannes Huisman, Director, Programme Planning and Budget Division, Office of Programme Planning, Finance and Budget, Department of Management Strategy, Policy and Compliance, introduced the Secretary-General’s reports on the implementation of the Board’s recommendations. Cihan Terzi, Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced that body’s related report, and noted the Board’s recognition of the low liquidity in the regular budget in 2018.
In other business, the Fifth Committee evaluated the system of administering justice throughout the Organization, a decade since the system was established.
Alayne Frankson-Wallace, Executive Director, Office of Administration of Justice, introduced the Secretary-General’s report and said the system was functioning well overall. She pointed to the distribution of a new handbook, meant to expand knowledge about dispute resolution mechanisms, as one of the Office’s initiatives to enhance staff members’ access to justice.
Shireen Dodson, United Nations Ombudsman, introduced the Secretary-General’s report on the activities of the Office of the United Nations Ombudsman and Mediation Services, pointing out progress in delivering services since its creation in 2002 and a pilot project to offer non-staff personnel access to the informal dispute resolution process. Mr. Terzi, the Advisory Committee Chairman, introduced that body’s related report.
The Fifth Committee also considered a request for a proposed subvention of $275,000 from the regular budget for the United Nations Institute for Disarmament Research (UNIDIR) for 2020. Mr. Huisman introduced the Secretary-General’s note on the request; Mr. Terzi presented the Advisory Committee’s related report and recommended the Assembly approve the request.
In other business, the Fifth Committee decided by acclamation to recommend to the Assembly the appointment of Tomoya Yamaguchi (Group of Asia-Pacific States) as a member of the United Nations Pension Committee. The appointment, if approved, would end 31 December 2020.
Before closing the meeting, Fifth Committee Chairman Andreas D. Mavroyiannis (Cyprus) urged the Fifth Committee to think more strategically about improving the scheduling of human resources reports. This is necessary to deferring the reports from session to session. The Fifth Committee’s time should be used optimally as the shift to an annual budget means budget and human resource issues will be considered every year.
The representatives of the United States, China and Switzerland also spoke today.
The Fifth Committee will meet again at 10 a.m. on Wednesday, 13 November, to discuss the pattern of conferences, the Joint Inspection Unit disabilities, construction and property management and human resources management.
Financial Reports and Reports of Board of Auditor
Peter Korn, Director of External Audit of Germany and Chair of the Audit Operations Committee, Board of Auditors, introduced the financial report and audit financial statements for the year ended 31 December 2018 and the reports of the Board of Auditors including for the United Nations (document A/74/5(Vol.I), International Trade Centre (documents Vol. III and Corr. 1), United Nations University (document Vol.IV), United Nations Development Programme (UNDP) (document A/74/5/Add.1), United Nations Capital Development Fund (document Add.2), United Nations Children’s Fund (UNICEF) (document Add.3), United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) (document Add.4) and the United Nations Institute for Training and Research (UNITAR) (document Add.5) and Voluntary funds administered by the Office of the United Nations High Commissioner for Refugees (UNHCR) (document Add.6).
Also included were: Fund of the United Nations Environment Programme (UNEP) (document Add.7), United Nations Population Fund (UNFPA) (document Add.8), United Nations Human Settlements Programme (UN-HABITAT) (document Add.9), United Nations Office on Drugs and Crime (UNODC) (document Add.10), United Nations Office for Project Services (UNOPS) (document Add.11), United Nations Entity for Gender Equality and the Empowerment of Women (UN-Women) (document Add.12), International Residual Mechanism for Criminal Tribunals (document Add.15) and the United Nations Joint Staff Pension Fund (document Add.16).
He also introduced the Secretary-General’s note (document A/74/202) transmitting the “Concise summary of the principal findings and conclusions contained in the reports of the Board of Auditors for the annual financial period 2018”. It summarizes the key issues of the audits addressed to the General Assembly regarding 18 entities, including 16 agencies, programmes and funds, and United Nations peacekeeping operations and the United Nations Joint Staff Pension Fund. All the entities received unqualified audit opinions and Volume II of the United Nations peacekeeping report received an unqualified opinion with an emphasis of matter. The reason for the emphasis of matter was the decommissioning of Galileo. The Board notes issues which affected the quality of asset data migrated from Galileo to Umoja.
Thirteen entities, including the United Nations, International Trade Centre, United Nations Capital Development Fund, UNDP, UNEP, UNFPA, UNICEF, UNHCR, UNODC, UNOPS, UNWRA, UN-Women and the International Residual Mechanism for Criminal Tribunals closed the financial year with a surplus, he said. In general, the financial position, of all entities remained strong or at least sufficient. The Board notes that the low liquidity in the regular budget during 2018 and the amounts borrowed from the Working Capital Fund in 2017 could not be repaid in 2018. Amounts borrowed from the United Nations Special Account and from closed peacekeeping missions were used to cover temporary liquidity mismatches.
In every audit report, the Board reviewed the status of old recommendations and notes that the overall rate of implementation of its recommendations had decreased from 48 per cent in 2017 to 41 per cent in 2018. The concise summary provides a snapshot of the United Nations reform activities and the preparedness of different United Nations entities. The Board agreed that this year no opinion would be expressed on the reform in order to give the United Nations time to implement the process, he said.
JOHANNES HUISMAN, Director, Programme Planning and Budget Division, Office of Programme Planning, Finance and Budget, Department of Management Strategy, Policy and Compliance, introduced the Secretary-General’s reports on implementation of the recommendations of the Board of Auditors contained in its report for the year ended 31 December 2018 on the United Nations (document A/74/323) and on the United Nations funds and programmes (document A/74/323/Add.1). Out of the 78 recommendations contained in volume I of the Board’s report for the year ended 31 December 2018, the Administration did not accept nine recommendations and requested closure of seven recommendations. The other 62 were under implementation as of August 2019, he said.
He also drew attention to annex I, in which the Board provided a summary of the status of implementation as of December 2018 of its 167 extant recommendations made in the prior financial periods. Of them, 13 had been fully implemented, 149 were under implementation, four had not been implemented and the remaining recommendation had been overtaken by events. The Board noted that many recommendations were dependent on the ongoing initiatives such as Umoja Extension 2, the shift to the annual programme budget and implementation of the Secretary-General’s reforms. Out of the total 334 recommendations relating to the previous 7 financial periods, the Board had assessed 151 as having been implemented, 149 as under implementation, 4 as not implemented and 30 as closed or overtaken by events.
CIHAN TERZI, Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced the body’s related report (document A/74/528), and welcomed that all entities under review have again received unqualified audit opinions from the Board of Auditors. The Advisory Committee notes the Board’s conclusion that the overall financial positions of the audited entities remained sound as of 31 December 2018 but observes that the Board noted the low liquidity in the regular budget in 2018.
Regarding the status of implementation of the Board’s recommendations, the Advisory Committee notes with concern the decline in the overall implementation rate of the audited entities, he said. The Advisory Committee concurs with the Board’s recommendations regarding treasury and reserve management and reiterates its previous recommendations on these matters that have been endorsed by the General Assembly. The ACABQ also concurs with the Board on several other issues including fraud-related matters, procurement, management of implementing partners and the use of consultants.
SAED KATKHUDA, observer for the State of Palestine, speaking on behalf of the “Group of 77” developing countries and China, said he is pleased that all the audited entities have received unqualified audit opinions and noted that 13 entities had closed the financial year with a surplus and 4 recorded a deficit. Despite these deficits, the Board had assessed that all entities had solvency and liquidity ratio that were generally sufficient. Yet the Group is concerned that the United Nations peacekeeping operations had a cash ratio of just 0.45 in 2018, a reduction from 0.66 in 2017, mainly due to non-payment of assessed contributions by Member States. Noting the low liquidity in the regular budget in 2018, he repeated the Group’s call to all Member States to pay their assessed contributions in full, on time and without conditions. The Group is apprehensive that there has been further deterioration in the implementation for the Board’s recommendations. Only 41 per cent, or just 353 of the 855 recommendations issued up to the year 2018, had been fully implemented, a substantial decrease from the already insufficient 48 per cent of 2017. The Group stresses the need for all entities to undertake prompt actions to ensure the Board’s accepted recommendations are implemented as a matter of priority. The Group will carefully review the reports and financial statements to identify specific concerns and potential systemic issues, he said.
JAN DE PRETER, European Union, said the Board’s high-quality reports and substantial recommendations have given the United Nations and Member States precious independent assessments on the use of the Organization’s funds. The reports greatly contribute to ensuring clear accountability to Member States and their taxpayers and support the Organization’s outstanding work for peace, security and economic welfare. The Board’s work is a crucial component of the United Nations system’s oversight framework, and consistently contributes to better governance.
The Board again issued an unqualified opinion regarding the financial and operation management of the United Nations and comes with numerous recommendations, he said. These recommendations help drive the United Nations system to operate in a more sound, transparent and cost-effective way, which lets the Secretariat carry out its mandates more effectively and efficiently. The fact that some organizations and entities reject the Board’s recommendations, or delay their implementation, is concerning. From 2017 to 2018, the number of rejected recommendations has increased and the implementation rate of accepted recommendations has decreased. The European Union will investigate this situation in detail during the informal meetings. The Union calls on the Secretary-General to fully implement the Board’s recommendations in a timely way to preserve and strengthen the accountability of the United Nations, he said.
JOSEPH LAURENCE WRIGHT II (United States) highlighted the importance of the Board’s work, as its oversight of the United Nations operations and finances is crucial to ensuring that the Organization functions effectively and efficiently. This year’s report provides valuable insight on several issues, including those essential to properly and fully implementing the United Nations reform agenda. The Board’s recommendations are critical to strengthening internal controls to prevent fraud, ensuring procurement efficiency and cost-effectiveness, improving treasury and capital project management, and completing the flexible workplace project in a speedy manner, he said, echoing the Board’s call for the Secretary-General to accelerate implementation of the Board’s recommendations.
FU LIHENG (China), associating himself with the Group of 77, said he commended the Board’s work in the context of the current liquidity crisis affecting the Organization’s regular budget. Calling for the implementation of the Board’s recommendations, he noted the Board’s conclusions that as of 31 December 2018 the overall financial situation of the United Nations was good. The audit report should have more details on Umoja, the internal control of medical insurance expenditures, cost recovery, treasury management, capital construction and the implementation of projects concerning humanitarian affairs. He also asked for more information on General Assembly resolution 72/266B, which stresses the key role of oversight bodies, including the Board of Auditors. He called on the Secretary-General to make use of their expertise and implement relevant recommendations in the reform process, adding that China will join other Member States to actively participate in consultations on this agenda item.
DMITRY S. CHUMAKOV (Russia Federation) said his delegation highly values the Board’s work, which shows a high level of independence. The Board’s reports are constructive and useful for the Fifth Committee and he appreciates the ratios, included in paragraphs 12 to 20, of the concise summary. He urged the Board to carry out an analysis of the regular budget, peacekeeping and tribunals and include information about their general ratio solvency trends. Financial reports should include financial analysis. He referred again to the Organization’s cash crisis, saying that the decision of the United Nations to carry out emergency measures was unjustified. He requested information about the monthly ratios for the regular budget, including September and October, and if available, for the November figures as well. He said he has requested information about how much savings have been generated by the emergency measures carried out by the Secretariat and is surprised that the Secretariat has not yet shared this information. He wondered if something is being concealed. The resources saved as a result of the emergency measures do not address the persistent structural financial issues surrounding the non-payment of assessments by certain Member States, he stressed.
Administration of Justice
ALAYNE FRANKSON-WALLACE, Executive Director, Office of Administration of Justice, introduced the Secretary-General’s report on administration of justice at the United Nations (document A/74/172), which was established 10 years ago. “On the whole, the system is functioning well,” she said, also noting that the report identified areas where improvement could be made. In 2018, efforts were made to resolve disputes informally without resorting to unnecessary litigation. There were several “group cases” relating to post adjustment for the Geneva duty station. The Secretary-General has brought several areas relating to the operation of the tribunals to the attention of the General Assembly. Among the several initiatives to enhance access to justice and knowledge about avenues for dispute resolution, is the dissemination of the new handbook “A staff member’s guide to resolving disputes” and a toolkit for self-represented applicants created by her Office.
SHIREEN DODSON, United Nations Ombudsman, introduced the report of the Secretary-General on the Activities of the Office of the United Nations Ombudsman and Mediation Services (document A/74/171) from 1 January to 31 December 2018. She said that her Office has developed a best practice approach, using three key areas of conflict resolution, since the ombudsman function was established by the Secretariat in 2002. To achieve greater coordination at the United Nations system level, she has initiated a network of ombudsmen and mediators of all member organizations of the Chief Executives Board for Coordination (CEB). In addition, she has taken several measures to maximize the Office’s ability to deliver quality services since assuming office a little over a year ago.
In 2018, the Office’s team assisted in 3,577 cases, a 10 per cent increase over the previous year, she said. Out of all cases, 2,776 originated in the Secretariat; 539 cases in the funds and programmes; and 262 cases in UNHCR. The figures include 65 mediation cases with a resolution rate of 83 per cent. She anticipated additional cases to surface in the Secretariat in the next reporting year after the restructuring of the resident coordinator system, which now operates under the Secretariat’s Development Coordination Office rather than UNDP. Following the establishment of a pilot project to offer access to informal dispute resolution to non-staff personnel, her Office handled 304 cases from non-staff personnel in 2018, up 35 per cent from the 225 cases in 2017. The caseload has been distributed among regional offices to absorb the additional volume. If the caseload volume keeps increasing, the Office will report with proposals to the Assembly, she said.
Mr. TERZI, ACABQ Chairman, introduced the body’s related report (document A/74/7/Add.10), welcoming the outreach efforts of the Office of the Administration of Justice, including the distribution of a guide on dispute resolution for staff members. The Advisory Committee, noting the positive results of the case disposal plan, encouraged greater efforts to reduce the length of time for case disposal and the number of ageing cases. It recommends that the Assembly take note of information provided in the report. Turning to the Office of the United Nations Ombudsman and Mediation Services, he said that the Advisory Committee trusts that continued efforts be made to encourage use of the informal dispute resolution, which is more cost efficient than the formal process. Regarding the pilot project to offer non-staff personnel access to informal dispute resolution services, the Advisory Committee recommends that the Assembly request the Secretary-General to provide more detailed information, including on the nature of conflicts and advice given, disaggregated data on each category of non-staff personnel, and the results of the pilot project.
Mr. KATKHUDA, observer for the State of Palestine, speaking again for the Group of 77, stressed the importance of the United Nations internal system of justice as an independent and transparent system operating to ensure respect for the rights and obligations of staff members. Citing data on trends relating to the administration of justice in 2018, he noted that the number of pending applications at year end for the United Nations Dispute Tribunal increased from 372 in 2017 to 404 in 2018, which is the highest number of pending applications since the system was introduced in 2009. On implementation of the case disposal plan in January 2019, he observed that it helped reduce the Dispute Tribunal caseload by 29.45 per cent, from 404 to 285, and the caseload pending over 401 days by 52.68 per cent from 205 to 97. However, he expressed concern about the length of time it takes to dispose of some cases, emphasizing that efforts should be strengthened to reduce this period as well as the number of ageing cases.
EMILIE BAY-SCHEIDEGGER (Switzerland), also speaking on behalf of Liechtenstein, said a fair, effective and efficient internal justice system is vital in creating a framework for achieving the Organization’s ambitious goals. While there has been some improvement in staff confidence in the proper management of professional disputes, there is still room for improvement. While almost half of staff members do not have access to the internal justice system, she welcomed the pilot project for access to informal justice for non-staff members through the ombudsman and mediation services. Adding that this is only a first step, she encouraged further reflection on establishing access to an effective judicial remedy.
Subvention for United Nations Institute for Disarmament Research
Mr. HUISMAN, taking the floor again, introduced the Secretary-General’s note on the request for a subvention to the United Nations Institute for Disarmament Research (UNIDIR) resulting from the recommendations of the Board of Trustees of the Institute on the work programme of the Institute for 2020 (document A/74/339). He said that in accordance with resolution 72/266 A, in which the Assembly approved the proposed change from a biennial to an annual budget period on a trial basis, the Assembly is requested to approve a proposed subvention of $275,000 to the Institute from the regular budget of the United Nations for 2020. The related provision is included under section 4, Disarmament, of the proposed programme budget for 2020.
Mr. TERZI, ACABQ Chairman, introduced the body’s related report (document A/74/7/Add.9), recommending that the Assembly approve the request for a subvention to the Institute of $275,000 from the regular budget for 2020.
Mr. KATKHUDA, observer for the State of Palestine, speaking again for the Group of 77, noted that the Institute will revise its methodology for budget projections ahead of the presentation of its work programme and budget in the annual report of the Director for 2020. The Group welcomes the fortieth anniversary of the Institute in 2020 as an opportunity to underline its unique role within the disarmament machinery and the importance for the Institute to have a sustainable funding structure and operating model that is consistent with its mandate and objectives.