United Nations Spending Restrictions Loosened Thanks to Recent Structural Changes, Management Chief Tells Fifth Committee, Outlining Key 2022 Financial Indicators
With Earlier, Timely Payment of Assessed Contributions, Organization Can Focus on Programme Delivery Rather Than Liquidity Control, Delegates Hear
Outlining a brighter financial picture for the Organization than in recent years, the United Nations top management official told delegates of the Fifth Committee (Administrative and Budgetary) today that structural changes approved in June at their second resumed session have eased the need for spending restrictions.
While this means the Organization can now focus on programme delivery instead of liquidity management, Catherine Pollard, Under‑Secretary‑General for Management Strategy, Policy and Compliance, said senior managers will keep carefully monitoring cash flows and reach out regularly to delegates to ensure cash shortages place operations at risk.
“Spending restrictions in the last few years may have averted a cash crisis and a disruption of operations, however, they hampered budget implementation and mandate delivery,” she said, adding that several activities and outputs were either postponed or cancelled. Despite the relaxing of hiring and spending restrictions in May, the Organization last year experienced the lowest rate of budget implementation since 2010. Fortunately, the Committee decided in June to use $100 million, of $279 million in unspent funds, to increase “on an exceptional basis and without setting a precedent,” the Working Capital Fund. “This decision is both timely and helpful, as the return of $279 million would have triggered a liquidity crisis again,” she said. [See paragraph 4 in Press Release GA/AB/4388 for details.]
Ms. Pollard detailed three main categories ‑ the regular budget, peacekeeping operations and the international tribunals ‑ as she laid out the Organization’s key financial indicators for 2022.
Full implementation of the Organization’s programme of work depends on realistic budget levels and timely contributions to ensure a stable, predictable financial situation throughout the year, she said, adding the Secretariat is committed to provide transparency and use the resources entrusted to it in a cost-effective, efficient manner. Member States meeting their financial obligations in full and on time is key, she stressed, noting that as of today, 13 October, 132 Member States have done so.
“As we have said on several occasions in recent years, predictability in the timing and amount of collections is critical for managing the Organization’s cash outflows and planning spending properly.” She appealed to the Member States who paid earlier this year to commit to their new positive payment patterns and asked others to commit to earlier payments. “The more we collect early, the greater will be our confidence in committing funds when we need them for programme delivery,” she added.
Ms. Pollard said Chart 1 shows how monthly regular budget collections continued to fluctuate significantly each year. For example, in 2022, the Organization collected $21 million more than anticipated in the first quarter, yet collections trailed estimates from April to nearly the end of September. There was a gap of more than $250 million for nearly four months and a peak of $279 million at the end of the second quarter. “Although collections were lagging, we did not see reason for concern, firstly because we had started the year with a healthy cash balance, and secondly, because several Member States had informed us about their payment plans,” she added. In September, the Organization borrowed the full amount of the Working Capital Fund to ensure sufficient cash to meet payroll obligations.
The Secretariat is waiting for the fourth quarter’s outcome from two perspectives: first, whether total collections in the quarter produce lower year-end arrears than in 2021; and secondly, whether the Organization collects more in November than December, similar to 2021. This pattern reduces uncertainty for fourth-quarter spending, she explained.
As seen in Chart 2, which tracks regular budget cash balance trends, stringent cash conservation measures over the last few years effectively increased liquidity to ensure business continuity, reducing the risk of disruptions by exhausting reserves, including the surplus cash of closed peacekeeping missions. Thanks to those steps, the regular budget cash deficit occurred later in the year from 2018 to 2021. However, in 2022 the Organization had to borrow from the Working Capital Fund in September, earlier than in 2021. “The maximum cash deficit has also been reducing each year since 2019, and we are optimistic that we will not have to borrow from closed peacekeeping missions this year,” she said.
Chart 3 shows the regular budget cash position available on 30 September 2021, 31 December 2021 and 30 September 2022. The amount of expected cash surplus at the end of 2022 will depend on collections in the fourth quarter. “We are reasonably certain that this will be less than last year, because we assessed nearly $77 million less than the budget due to return of unspent funds,” she said.
Chart 4 summarizes the status of regular budget assessments as of 30 September 2021 and 30 September 2022. In 2022, assessments were issued for $2.93 billion, $22 million less than the $2.95 billion issued as of 30 September 2021. Payments received were $300 million less, with $2.2 billion received by 30 September 2022, compared with $2.5 billion on 30 September 2021. She said the Chart also reflects a reduction in unpaid assessments from $1.3 billion as of 30 September 2021, to $1.2 billion as of 30 September 2022. This was because the Organization started the year with less outstanding assessment than in 2021, she told delegates, adding: “We hope the year-end arrears will remain stable or decrease further, as large arrears deplete liquidity reserves”.
As seen in Chart 5, 131 Member States had fully paid their regular budget assessments in full by 30 September 2022, compared to 130 Member States at the end of September 2021. Chart 6 lists the 131 Member States that have paid their assessed contributions in full. She thanked the States and acknowledged the advanced 2023 payments from India and Nauru.
Chart 7 shows the 62 Member States who had yet to pay their assessments to the regular budget in full, as of 30 September 2022 ‑ one less Member State than a year earlier. She noted that since the cut-off date, Guinea has paid in full, bringing the count of fully paid Member States to 132. Chart 8, on unpaid regular budget assessments, provides a comparative view of the largest outstanding assessments as of 30 September 2021 and 30 September 2022. According to the chart, the United States was responsible for the largest portion of unpaid regular budget assessments, owing $915 million as of 30 September 2022, compared with $1.002 billion on 30 September 2021. Brazil followed, owing $56 million, compared with $58 million in 2021, and then the Russian Federation, which owed $53 million at the end of September this year, compared with zero at the end of September 2021.
Ms. Pollard then turned to peacekeeping operations, which have a different financial period than the regular budget and run from 1 July to 30 June. As shown in Chart 9, assessments during 2022 totalled $7.4 billion, with $3.8 billion being assessed in July for the fiscal 2022/23 year for mandated periods. Assessments in 2022 were higher because a part of the 2021/22 fiscal year was assessed in January, after the new approved scale of assessment was in place, she explained. Collections as of 30 September 2022 tallied $5.0 billion and the total amount outstanding on 30 September 2022 was $3.7 billion, compared to $2.3 billion on 30 September 2021. Chart 10 indicates that on 30 September 2022, 43 Member States had paid all peacekeeping assessments in full, compared with 42 on 30 September 2021. Since the cut-off date, Kiribati, Mozambique, Namibia and the United Kingdom had paid their assessments in full.
Chart 11 provides an overview of outstanding assessments for each peacekeeping operation. The $3.7 billion outstanding on 30 September 2022 comprises $3.3 billion owed to active missions and $396 million for closed missions. For active and closing missions, out of $3.3 billion, $2.7 billion relates to 2022 assessments, while $621 million relates to assessments in 2021 and before.
Chart 12 lists Member States with unpaid peacekeeping assessments as of 30 September 2022, as well as their outstanding amounts as of 30 September 2021. According to the chart, the United States was responsible for the largest portion of unpaid peacekeeping assessments, owing $1.53 billion as of 30 September 2022, compared with nearly $1.3 billion on 30 September 2021. China followed by owing $736 million this year, compared with zero at the end of September 2021; and then Japan, which owed $306 million this year, compared with zero in 2021. The Chart notes that Japan made a payment of $271.6 million after 30 September 2022.
She then reminded delegates that in resolution 73/307, the General Assembly decided that the Secretary‑General should issue assessments for peacekeeping operations for the full budget period, including the period for which the mandate has not yet been approved by the Security Council. It was understood that the “advance” assessment will be due within 30 days of the effective date of the extension of the mandate.
Chart 13, on advance collections for peacekeeping, shows the impact of the Assembly decision. In July 2022, $2.5 billion was assessed for peacekeeping operations for the “non-mandated” period through the 30 June 2023. Comparatively, such assessments for “non-mandated” periods were $2.5 billion for 2020/21 and only $381 million for 2021/22, she said. The lower amount for the 2021/22 period is due to the non-availability of scales for the January-to-June 2022 period. This chart shows the amounts paid voluntarily by Member States against these assessments. Chart 14 shows those Member States that have paid in full for the period ending 30 June 2023, including the non-mandated period.
Along with the Assembly decision in resolution 73/307 to remove restrictions on the cross-borrowing of cash for active missions, the assessment and collection for non-mandated periods continues to improve the overall liquidity of active peacekeeping operations, she said. To provide another mechanism to ease liquidity problems, the Assembly, in resolution 76/272, directed the use of the Peacekeeping Reserve Fund as the first choice for borrowing for active peacekeeping operations, retaining $40 million to support new missions and the expansion of existing missions, as originally intended for the Fund.
Chart 15 shows the status of peacekeeping cash over the last three years. As of 30 September 2022, the cash balance consisted of about $2.4 billion in the accounts of active and closed missions, and the Peacekeeping Reserve Fund, she said. The use of the Fund ‑ the first source for borrowing for peacekeeping operations ‑ is restricted to new operations and expansion of existing operations. The cash of each mission is delineated in a separate account, as directed by the Assembly, and cross-mission borrowing is used when needed, she explained.
Chart 16, on outstanding payments to Member States, shows the total liabilities for payments as of 30 September 2022. Payments for troops, formed police units and for contingent-owned equipment claims totalled $26 million for active and closing peacekeeping operations and $86 million for closed missions. With the approval of Assembly resolution 76/280, the $86 million for closed peacekeeping missions will be settled in early 2023. Payments for contingent-owned equipment and troops/formed police unit costs are settled for all missions up to 30 June 2022 except African Union-United Nations Hybrid Operation in Darfur (UNAMID). Chart 17, on outstanding liabilities to Member States, shows the breakdown of the overall amount owed for troop and formed police units, and for contingent-owned equipment to Member States as of 30 September 2022.
Turning to the international tribunals, Ms. Pollard said Chart 18 lays out their financial situation. As of 30 September 2022, total contributions outstanding for the tribunals tallied $55 million, compared with $60 million as of 30 September 2021. This includes amounts outstanding for the International Criminal Tribunal for Rwanda, which was last assessed in 2016; and the International Criminal Tribunal for the Former Yugoslavia, last assessed in 2018.
Chart 19 lists the 107 Member States that had paid their assessed contributions in full for all the tribunals, three less than 30 September 2021. Chart 20 provides the breakdown of unpaid assessments while Chart 21 shows the month-by-month position of the tribunals’ overall cash balances, over the last three years. As per Assembly resolution 76/272, the surplus cash in closed tribunals will be used for regular budget liquidity if needed, from January 2023.
Chart 22 lays out the status of assessments and unpaid assessments for each of the three categories of operations, she said. Year-end numbers are provided for 2020 and 2021 and third-quarter comparisons for 2021 and 2022. It also provides an overview of the evolution of the cash situation for all three categories of operations, as well as the evolution of the outstanding payments to troop/police contributing countries for active peacekeeping operations, she said.
The Fifth Committee will reconvene at 10 a.m. on Friday, 14 October, to discuss the proposed 2023 programme budget for special political missions.
United Nations Office for Partnerships
ANNEMARIE HOU, Executive Director of the United Nations Office for Partnerships, introduced the annual report of the Secretary‑General on the Office (document A/77/320). By engaging key stakeholders, the Office serves as a global gateway to catalyse and co‑create collaborations that accelerate solutions to achieve the Sustainable Development Goals. To fulfil its mandate, the Office leverages expertise and networks across its initiatives and programmes, which include the Sustainable Development Goals Strategy Hub, United Nations Democracy Fund, United Nations Fund for International Partnerships (UNFIP), United Nations Partnership Trust Fund and the Secretary‑General’s Sustainable Development Goals Advocates and Climate Action Team. In mobilizing action towards the 2030 Agenda for Sustainable Development, the Office organized key events, convenings and initiatives which included the virtual Sustainable Development Goals Moment during the Assembly’s high-level week. It also conceptualized, curated and delivered significant activations which included a performance and interview with BTS which garnered more than 80 million views towards growing the global movement for the Global Goals. The new Sustainable Development Goals Studio, built in collaboration with the United Nations Department of Global Communications and the Netherlands, streamlines the creation of original and compelling content for contemporary audiences, she added.
The Office also manages distinct programmatic trust funds. As the primary interface between the United Nations Foundation and the United Nations system, UNFIP has collaborated on almost 700 innovative, cross-sector projects in the past two decades, she said. In 2021, UNFIP disbursed $11.9 million in funding from the United Nations Foundation for United Nations projects. The United Nations Democracy Fund, she continued, subsists entirely on voluntary contributions from Governments; enables projects that empower civil society, promote human rights and encourage the participation of all groups in democratic processes and has supported over 880 projects in more than 130 countries. In 2021, the Fund disbursed $9.2 million for 34 projects. Going forward, the Office will continue to foster the inclusive and transformative engagement of partners and invest in its capacity to deliver results and take partnerships to scale, she said.
JIBRAN KHAN DURRANI (Pakistan), speaking on behalf of the “Group of 77” developing countries and China, commended the United Nations Office for Partnerships for advancing the implementation of the 2030 Agenda and providing partnership and advisory outreach services. He then spotlighted two new initiatives: a $20 million investment in the “Women Rise for All” to promote health and economic empowerment of women for a fair recovery from the pandemic and a $24 million investment in the New Frontiers in Research Fund for post-pandemic recovery. The Group noted the United Nations Foundation’s role in mobilizing private contributions to the COVID‑19 Solidarity Response Fund, effective use of social media platforms through the Sustainable Development Goals Advocates and improved trends in the United Nations Democracy Fund’s fifteenth and sixteenth rounds of funding, he said.
The Group, he continued, deliberated on the Democracy in Action reports and noted UNFIP’s increased activity in global health and girls in education. As the United Nations Foundation has funnelled $2.2 million to various United Nations agencies as a fiscal agent, the Group would be interested in learning more through consultations, he said. He encouraged the United Nations Office for Partnerships to strengthen partnerships with regional and sub-regional organizations, support the development efforts of developing countries and enhance accountability and transparency.