Delegates Diverge Sharply on Annual Programme Budget Cycle, as Fifth Committee Debates Merits of Secretary-General Proposal to Make Change from Biennial Period Permanent
Delegates in the Fifth Committee (Administrative and Budgetary) today laid out sharply different perspectives on whether the United Nations shift to an annual budget cycle three years ago is viable for the long term.
In introducing the Secretary-General’s report which reviews the new budgetary cycle — the most significant change in the Organization’s planning and budgetary processes in decades — Catherine Pollard, Under-Secretary General for Management Strategy, Policy and Compliance, said the shift from a biennial budget cycle in 2020 has produced more effective mandate delivery as managers can adapt faster to changing demands and conditions facing the Organization. Planning programmes and formulating budgets, as well as carrying out internal preparations, closer to implementation and in a more integrated manner, had led to greater engagement of programme managers and a more results-orientated culture. In addition, the link between past performance and current plans has been strengthened. “It has also enabled more resource predictability and reduced the number of instances of re-costing,” she said, recommending that the General Assembly end the three-year trial period and make the annual budget permanent in 2023.
Yet Pakistan’s delegate, speaking on behalf of the “Group of 77” developing countries and China, said the Group has clearly and consistently expressed its concerns about some changes, especially the disruption of established budgetary procedures and practices, including the sequential nature of the proposed programme budget. The intergovernmental nature of the United Nations must be preserved, he stressed. However since the annual budget cycle’s implementation on a trial basis, the proposed programme budget is being presented to the Advisory Committee on Administrative and Budgetary Questions (ACABQ) before members of the Committee for Programme and Coordination can provide recommendations on the programme plans. “What is at stake is the way in which the United Nations will operate for decades; this is something too important to go without transparent and constructive action,” he said.
Echoing those concerns and stressing that the budget cycle should contribute to a more agile and responsive United Nations, Uganda’s representative, speaking for the African Group, emphasized that the Programme and Coordination Committee has a clear mandate to issue recommendations and it is the Assembly’s role to approve them. This process is particularly important so as to preserve the intergovernmental review of the programme plan and budget, he stressed, regretting that this sequence of events has not been followed. Along with Pakistan’s delegate, he called for stronger interaction between that Committee and the Economic and Social Council and said both groups will work to preserve the Organization’s intergovernmental nature.
Abdallah Bachar Bong, Chair of the Advisory Committee, introducing that body’s related report on shifting to an annual budget cycle, said the Secretariat’s report is not sufficiently supported with comprehensive assessments of all aspects related to both biennial and annual cycles. The Assembly should ask the Secretary-General to comprehensively review the impact of the annual cycle on mandate implementation.
The speaker for the Russian Federation urged Member States to carefully, closely and impartially study all of the advantages and disadvantages of the Secretary-General’s reform at the administrative and budgetary levels. Though Member States were assured in 2017 that the budget cycle transition would be cost neutral, each budget since 2020 has confirmed that this was not the case. The Secretariat’s workload has doubled and sequencing was disturbed. Flexibility, a main proclaimed advantage for an annual budget, has not been borne out, she added, while underlining the Advisory Committee’s doubts.
Yet other delegates voiced their support for the Secretary-General’s initiative to move to an annual budget cycle. Japan’s representative noted that the trial has shown the Organization can respond more effectively to changing needs and new circumstances with a programme budget based more on current realities and accurate assumptions. The annual budget also provides an opportunity to boost predictability by minimizing “Add-Ons”. To address the increased workload for the Secretariat, Advisory Committee and Member States, he encouraged better use of technology, including Umoja; merging reports where applicable; and increasing informal conversations.
The speaker for Mexico said an annual budget favours transparency and accountability while allowing for a more complete review of programmes, performance and resource allocation. It has demonstrated its usefulness and relevance in improving programme guidance, resource planning, the implementation of mandates and results-based management.
Likewise, the representative of the United States said substantial benefits were achieved during the three-year trial period, which create a sound basis to make the annual budget permanent without delay. Any discussion on sequencing should acknowledge that annual budget reforms are the only rational path forward if Member States intend to move the Organization into the twenty-first century, he said, adding that “reforms should be improved upon, not undone”.
Also today, speakers considered the financial performance of the programme budget for 2021. Maria Costa, Director of the Finance Division of Department of Management Strategy, Policy and Compliance’s Office of Programme Planning, Finance and Budget, introduced the Secretary-General’s report on the matter. Mr. Bachar Bong introduced the Advisory Committee’s related report.
In the meeting’s first order of business, Ms. Costa introduced the Secretariat report on revised estimates for the United Nations Integrated Office in Haiti (BINUH), under the proposed programme budget for 2023 for special political missions. She asked the Assembly to appropriate an additional amount of $5.63 million under section 3, Political affairs, and $299,900 under section 36, Staff assessment. Mr. Bachar Bong introduced the Advisory Committee’s related report.
Also speaking today were representatives of Morocco, Egypt, Botswana, United Kingdom, China, Cameroon, Turkiye and Cuba.
The Fifth Committee will reconvene at 10 a.m. on Monday, 5 December, to discuss Umoja and other 2023 proposed programme budget issues.
Financing of United Nations Integrated Office in Haiti
MARIA COSTA, Director of Finance Division, Office of Programme Planning, Finance and Budget, Department of Management Strategy, Policy and Compliance, introduced the revised estimates pertaining to the United Nations Integrated Office in Haiti (BINUH) under the proposed programme budget for 2023 for special political missions (document A/77/6(Sect.3)/Add.7). She said the Security Council’s extension and expansion of BINUH’s mandate on 15 July 2022 means that the proposed additional resource requirements associated with resolution 2645 (2022) were not included in the original 2023 proposal. The revised estimates also include requirements associated with a much-needed reinforcement of the mission’s security capacity due to deteriorating security conditions since April. This reinforcement, she noted, was initially resourced through the Secretary-General’s authority for unforeseen and extraordinary expenses.
Amounting to $5.63 million, net of staff assessment, the additional resource requirements will provide for eight more United Nations police personnel, 38 new civilian personnel positions and the operational costs to support the additional mandated activities and enhanced security measures, she continued. She then requested the Assembly appropriate an additional amount of $5.63 million under section 3 (Political affairs) and $299,900 under section 36 (Staff assessment). The latter amount will be offset by an equivalent amount under Income section 1 (Income from staff assessment), she added.
ABDALLAH BACHAR BONG, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced its related report (document A/77/7/Add.19). Noting that the additional resource requirements for BINUH for 2023 following Council resolution 2645 (2022) raise the total proposal to $27.97 million, he said this represented an increase of $6.13 million, or 28.1 per cent, when compared with the appropriations for 2022. The Advisory Committee recommended approving the Secretary-General’s proposed deployment of eight additional United Nations police personnel and the establishment of 25 international positions and 13 national positions. On operating costs, the Advisory Committee recommended a reduction of 5 per cent under consultants and consulting services and under other supplies and services. The total budgetary impact of these recommendations, he pointed out, would represent a reduction of $21,000 to the level of additional resources proposed for 2023.
Financial Performance Report on Programme Budget for 2021
Ms. COSTA, Director of the Finance Division, Office of Programme Planning, Finance and Budget, Department of Management Strategy, Policy and Compliance, introduced the Secretary-General’s financial performance report on the programme budget for 2021 (document A/76/347). She noted that the 2021 programme budget’s implementation was adversely affected by the COVID‑19 pandemic and led to the modification, postponement or cancellation of some planned activities as well as an abnormally low level of consumption under several budget classes, including hospitality, experts, travel and supplies and materials. To ensure continuity of operations and protect the health and safety of staff and delegations, the Organization extended its remote working arrangements across duty stations. Within existing provisions, it invested in additional software licences and upgrades to the enterprise network to support the communications infrastructure, facilitate the Organization’s uninterrupted operations and ensure continuous support to the intergovernmental processes and meetings of Member States.
The collection of assessments was higher than expected during 2021, she said. In April, the Secretariat recorded a large collection which provided a greater margin for safely committing funds. Restrictive measures to preserve liquidity were gradually relaxed, including the hiring freeze for the regular budget posts and other restrictions on non-post expenditures, as overall cash inflows and outflows were carefully monitored to avert any potential defaults in payments. The early collections also obviated the need for any special commitments at the end of the year.
The final expenditure incurred in 2021 totalled $3.02 million, $206.8 million less than the $3.22 million appropriation approved by the General Assembly in its resolutions 75/254 A-C, 75/253 B and 75/253 C, she said. The final expenditure includes $17.5 million incurred in respect of subventions and commitment authorities, pursuant to Assembly resolutions 75/253 A and 75/255, for which no appropriations were approved. The actual income fell short of approved estimates by $15.6 million, due mainly to lower-than-approved income from staff assessments, reflecting the lower post expenditure. The lower post expenditure is due mainly to the higher-than-approved vacancy rates, resulting mainly from the continued impact of the hiring freeze, which was maintained until the second quarter of 2021. She emphasized that the pattern of expenditure experienced in 2021 is not expected to persist and is not to be construed as a predictor of future expenditure volume and pattern.
Mr. BACHAR BONG, Chair of ACABQ, introducing the report of the Advisory Committee on the financial performance of the programme budget for 2021 (document A/77/7/Add.18), said overall under-expenditure totalled $206.83 million, or 6.4 per cent), of the $3.22 billion total appropriation for 2021. Underscoring that the Assembly decided to use $100 million of the unspent funds of 2021 to increase, on an exceptional basis and without setting a precedent, the Working Capital Fund, he trusted that the Secretary-General will provide an analysis of the impact of the increased Fund on the liquidity management in the context of the next programme budget.
In its previous report on the financial performance of the 2020 programme budget, the ACABQ discussed the issue of the special funds commitments, in an amount of $116.7 million established in December 2020, he said, noting the absence of information on the utilization of those commitments in the financial performance report for 2021. On matters relating to managing the commitments, the ACABQ noted the remaining balance of $17.7 million for 2020 was not cancelled by the end of the 2021 financial period, as required by Financial Regulation 5.3, and such information is not disclosed in the financial performance report for 2021. It also noted issues associated with the utilization of the special fund commitments as identified by the Board of Auditors, and the lack of clear criteria for their exceptional use. Financial Regulations and Rules should be strictly adhered to in budget implementation and management, he stressed. The Advisory Committee recommends that the Assembly request the Secretary-General to include all relevant information on the establishment and utilization of commitments in future performance reports to improve transparency and accountability.
In accordance with Financial Regulation 5.3, the balance of $21.7 million as at 31 December 2021, which was transferred from 10UNA fund to 10RCR fund in December 2020 from the programme budget for 2020, should also have been included in the cancelled prior-period obligations in the financial performance report for 2021, as part of the credit against assessments to Member States for 2023, he said. Noting that the financial performance report for 2021 does not disclose related information, he trusted that the Assembly will provide clarification.
On 10RCR fund management and cost recovery, he said the $14.8 million charged by the United Nations Support Mission in Libya (UNSMIL) for 2017 to 2021, as non-spendable revenue — which has been identified by the Board of Auditors in its report for the period ended 31 December 2021 — should be returned as part of the credit against assessments to Member States for 2023, rather than for 2024. The Board also observed inefficient utilization of significant accumulated surplus of the cost-recovery fund, an accumulated $448.5 million in surplus as of 31 December 2021. The Assembly should ask the Secretary-General to conduct a review of the accumulated surplus of the cost-recovery fund, with a view to maintaining a reasonable surplus, utilizing the resources efficiently and identifying credits to return to Member States.
Subject to a decision by the Assembly on the review of changes to the budgetary cycle, more clarification is needed for the final budget approval process, the timing of the submissions of the reports and the types of the related reports, he stressed. Noting the lack of sufficient data in the financial performance report for 2021, he said the Secretary-General’s report should be enhanced to provide more comprehensive information and justification for the budget implementation and management by section and object of expenditure, as illustrated by the comments and recommendations contained in paragraphs 19, 21, 23, 28, 31, 34, 37 and 63 of the ACABQ report. Future performance reports should include a table or annex detailing all charges against the contingency fund for a performance period, with information and explanations — a move which should help provide comprehensive information on programme budget performance. Additionally, the threshold of 5 per cent for explanations of material variances between actual expenditures and appropriations should be applied to each of the field-based special political missions.
He then turned to the Secretary-General’s proposal to merge the contents of his report on the transfers between sections with the performance report of the programme budget. Taking into account the matters concerning the budgetary process and the approval of the Assembly discussed in its report — and noting that the Secretary-General reports contain some of the same justifications for variances of final expenditures against the appropriations of an annual budget — the Advisory Committee sees merits in joining the two reports for the Assembly’s consideration, subject to a decision by the Assembly on the review of changes to the budgetary cycle. Such a report should contain more comprehensive information and be submitted in April or May, to facilitate the ACABQ’s review of the proposed programme budget during its spring session.
JIBRAN KHAN DURRANI, (Pakistan), speaking on behalf of the “Group of 77” developing countries and China, noted a significant under-expenditure of $206.8 million in the 2021 regular budget, 6.4 per cent less than the approved appropriation. The highest under-expenditure was observed in special political missions, under Section 2 — Political Affairs, of $63.8 million or 8.7 per cent; under Human Rights Section 24, of $22.4 million, or 17.2 per cent; and under Economic and Social development in West Asia, of $12.8 million or 22.7 per cent of the approved appropriation. He noted that due to unpaid assessments, the Secretary-General imposed a ceiling of 90 per cent on expenditures to avoid disrupting operations. After the injection of $100 million of Working Capital Funds, pursuant to last year’s resolution, the Group would also like to see its impact over liquidity management in the next programme budget.
The Group also notes the upward trajectory of over-expenditure under the “consultants” section for three consecutive years, he said. The same trend is seen this year, with 99 per cent of funds already consumed as of 30 September 2022. He encouraged the Secretary-General to provide more information on the rising trend of this over-expenditure in hiring consultants in the upcoming performance reports. He also expected that the lessons learned during previous budget periods would be applied when preparing future proposed programme budgets. The Group also noted the net return of surplus of $178.8 million in 2021, which would be reflected as a credit against Member States for the year 2023, as per the Financial Regulations and Rules of the United Nations. The Group also observes the accumulation of $448.5 million in surplus in the cost recovery fund and its gradual increase to 129 per cent in 2021, compared to 2016. The Group would like more details and information on the need of identification of credits back to Member States, he said.
Review of Efficiency: Review of Changes to Budgetary Cycle
CATHERINE POLLARD, Under-Secretary General for Management Strategy, Policy and Compliance, introduced the Secretary-General’s report titled “Shifting the management paradigm in the United Nations: review of changes to the budgetary cycle” (document A/77/485). She said the report demonstrates the benefits of planning closer to implementation and in a more integrated manner. The proximity of the programme plan and budget formulation to the implementation period, along with the internal preparation process, is boosting the engagement of programme managers and creating a more results-orientated culture. This contributes to more effective mandate implementation. It also enables faster adjustment to new mandates and changing demands and conditions. The shorter planning cycle and integrated documentation is strengthening the link between past performance and current plans. “It has also enabled more resource predictability and reduced the number of instances of re-costing,” she said.
As the trial period progressed, the presentation format of the annual programme budget was refined, based on Member States’ early engagement and guidance by the General Assembly, which was based on recommendations from the Committee for Programme and Coordination and the ACABQ, she explained. In June, the Committee for Programme and Coordination commended efforts to improve the quality of the proposed programme budget, in accordance with Assembly resolution 76/236. As the Secretariat strives for the greater transparency and accountability demanded by Member States, the preparation process has also become more efficient and sustainable, which aligns with departments’ operational realities. The annual programme budget also creates a more holistic review by Member States, with programme plans, performance and resource requirements integrated into one report and considered in one main Assembly session.
Turning to the issue of sequencing, she said the Secretary-General presented different scenarios in his report titled “Shifting the management paradigm in the United Nations: budgetary procedures and practice” (document A/74/852). This included the advantages and disadvantages of an early Committee for Programme and Coordination and a budgetary cycle in which the ACABQ considered the post and non-post resource requirements (Part III) on the basis of programme plans (Part II), approved by the Assembly. No action was taken by the Assembly on the report. She said the Secretariat has reached out to Member States, the ACABQ, the Committee for Programme and Coordination, the Fifth Committee and other internal stakeholders in preparing this report. The process was inclusive and systematic, ensuring the reported conclusions and achievements are supported by evidence. “We plan to continue our outreach to Member States while also responding to different requests for briefings and clarifications,” she added. The conclusion and recommended action for the Assembly are included in paragraphs 82 and 83: asking the Assembly to note the report and lift the trial period, effective from 2023.
Mr. BACHAR BONG, ACABQ Chair, introduced that body’s related report on shifting the management paradigm in the United Nations (document A/77/7/Add.20). While the Advisory Committee acknowledges the efforts made to implement the annual budget cycle, he pointed out that the information contained in the Secretary-General’s report, including on efforts to engage with Member States and other relevant stakeholders, remains general in nature; it is not sufficiently supported with comprehensive assessments of all aspects related to both biennial and annual cycles. In light of the insufficient information to support the increased agility of programme planning as a benefit of the annual budget cycle, the Advisory Committee recommended the Assembly request the Secretary-General to comprehensively review the impact of the annual cycle on the implementation of mandates. For his part, the Secretary-General should continue his efforts to improve the presentation and format of programmes and deliverables and the link between proposed resources and programme delivery. The Assembly should also request the Secretary-General to ensure that a strong culture of responsibility and accountability consistently characterize the engagement of programme managers, regardless of the length of the budget cycle, he added.
Noting the lack of a comprehensive assessment of the increased workload and associated costs resulting from the annual budget cycle, he said the Advisory Committee stresses the preservation of the sequential nature of the review process. A review of the programme planning, the programme aspects of the budget, the monitoring of implementation, the methods of evaluation and the Financial Regulations and Rules as well as the relevant resolutions should have been an integral part of the Secretary-General’s report. As such, the Advisory Committee recommends that the Assembly request the Secretary-General to undertake this review and report thereon as soon as possible, he said. Furthermore, a decision on the change of the programme budget to an annual cycle or an extension of the trial matter is a policy matter for the Assembly.
MUHAMMAD AAMIR KHAN (Pakistan), speaking on behalf of the Group of 77 and China, said that since the initial stages of the annual budget cycle reform, the Group has clearly and consistently expressed its concerns about some changes, especially the disruption of the established budgetary procedures and practices, including the sequential nature of the proposed programme budget. The Group also noted other challenges, including the increased workload and the more frequent expiration of funds, as pointed out by the Advisory Committee. Stressing the importance of preserving the United Nations intergovernmental nature, he said to ensure this, Member States, through the Committee for Programme and Coordination, must approve programme plans as the basis for the preparation of the programme budget. Since the implementation of the annual budget cycle on a trial basis, the proposed programme budget is being presented to the Advisory Committee before members of the Committee for Programme and Coordination can provide recommendations on the programme plans.
During the sixty-second session of the Committee for Programme and Coordination, the Group’s members represented in that body made a new proposal to ensure the preservation of the sequential nature of the budget, while respecting its annual cycle. “It is regrettable that some other members of CPC showed no willingness to discuss and find a solution on what represents a core concern for the Organization,” he said. After the three-year trial period, the views of more than two-thirds of the United Nations membership must be considered. In the same way that the Group, despite its original preoccupations, committed to work constructively with the Secretary-General on this initiative, it now expects the same constructiveness from every stakeholder involved in the process. These discussions are a valuable opportunity to strengthen the role of the Committee for Programme and Coordination. The interaction between that body and the Economic and Social Council must be strengthened and empowered, he said. Any outcome of the review must find a balance that satisfies every stakeholder in the negotiation and ensures accountability, responsiveness and effectiveness of mandate delivery. “What is at stake is the way in which the United Nations will operate for decades; this is something too important to go without transparent and constructive action,” he said.
MEDARD AINOMUHISHA (Uganda), speaking on behalf of the African Group and aligning himself with the Group of 77 and China, stressed that the budget cycle should contribute to a more agile and responsive United Nations. Expressing concern about the disruption of the established budgetary procedures and practices, in particular, the sequential and the intergovernmental nature of the proposed programme budget, he emphasized that the Committee for Programme and Coordination has a clear mandate in making recommendations and it is the General Assembly’s role to approve those recommendations. This process is particularly important to maintain the intergovernmental review of programme plan and budget, he stressed, noting that it is unfortunate that this sequence of events has not been followed.
Calling for stronger interaction between the Committee for Programme and Coordination and the Economic and Social Council, he said the African Group will work within the Group of 77 and China to preserve the intergovernmental nature of the Organization. It is also vital to address the programmes lacking recommendations from the Committee for Programme and Coordination, he said, adding that open programmes should be reviewed by the Assembly plenary or the relevant main Committees where their mandates emanate. Calling for constructive and meaningful deliberations on this important agenda item, he cautioned that a decision that is devoid of consensus will undermine the present reform processes and negatively impact future proposals aimed at achieving efficiency and effectiveness.
Mr. BOUTAQA (Morocco) reiterated his country’s support for the Secretary-General’s vision to transition to an annual budget which had positive impacts in the establishment and adoption of a more credible and precise budget. During the trial period, the annual budget demonstrated its effectiveness in allowing for more realistic and more results-oriented budgeting, more flexible programme planning as well as better visibility and predictability of financial resources. A shorter budget is and can provide more visibility to Member States on their financial obligations, he emphasized.
AHMED MOHAMED ISMAIL ELMAHS (Egypt), associating himself with the Group of 77 and China, said that on the question of annual versus biennial budgets, the trial period reflected positive aspects as well as areas which require adjustments, especially those relating to the disruption of the cycle and its impact on the work of the Fifth Committee. The majority of Member States believe supervision of programmes is equally important to the supervision of the budget, he said, also adding: “I am sure that many delegations here will not be in a position to adopt a budget proposal without scrutinizing it.” Egypt will continue to work with relevant parties to help tackle current flaws and preserve the intergovernmental nature of the Organization. The Secretariat is an integral part of such discussions and could help find a compromise between an effective cycle and respecting the sovereignty of States to oversee United Nations programmes implemented in their territories. “A division around the review, or an imposed decision, will be the worst-case scenario,” he cautioned.
YAMANAKA OSAMU (Japan) voiced his country’s support for the Secretary-General’s initiative to move to an annual budget cycle. The trial period, he noted, has demonstrated that the Organization could more effectively respond to changing needs and new circumstances with a programme budget based more on current realities and accurate assumptions. While an annual budget is not perfect, Member States must make collective efforts to improve the budget progress and its content to make the Organization stronger, more effective and more efficient. States, he suggested, can improve the link between proposed resources and results by refining the components and presentations of deliverables. The annual budget also provides an opportunity to further enhance predictability by minimizing “Add-Ons”. To address the increased workload for the Secretariat, ACABQ and Member States, he encouraged seeking opportunities to make better use of technology including Umoja, merge reports where applicable and increase informal conversations.
KATLEGO BOASE MMALANE (Botswana), aligning himself with the Group of 77 and China as well as the African Group, expressed concern about the disruption of established budgetary procedures and practices, in particular the sequential nature of the proposed programme budget. It is vital to strengthen the role of the Committee for Programme and Coordination and its interaction with the Economic and Social Council, he said, adding that any open programmes should be reviewed by the General Assembly plenary or its relevant Main Committees. Stressing the importance of tackling the increased workload of the Committee for Programme and Coordination and the Advisory Committee, he noted the “need to explore an increment to posts and non-post resources”. Also proposing that the duration of the Committee for Programme and Coordination’s annual in-person meeting should be five weeks to give Member States enough time to tackle the programmes before them, he said his delegation will work constructively in order to reach consensus on this item.
JAMES STAPLES (United Kingdom) said his country remains a firm supporter of the Secretary-General’s reforms. While the trial period has been a learning exercise for all, the annual cycle has led to a more agile and responsive Organization. The annual budget progress, he commended, has been a catalyst for a more results- oriented Organization that builds on programme performance and results achieved while incorporating lessons and outcomes of evaluations to enhance mandate delivery. The United Nations should further strengthen this culture of results and strive for an even greater level of ambition and accountability, he encouraged. Regarding the budget review process, he noted that its sequential nature has been maintained. Any further change to enhance the process must deliver significant additional benefits for operations and mandate delivery. Major chances at this stage would be counterproductive, he cautioned while calling for a period of stability to allow the programme planning and intergovernmental review processes to “bed in”.
JESÚS VELÁZQUEZ CASTILLO (Mexico) said that an annual budget favours transparency and accountability, and allows for a more complete review of programmes, performance and resource allocation. Welcoming the progress made towards establishing an annual budget, he recognized that some parts still need to be fine-tuned such as cycle sequencing and review of results, which require particular attention in order to consolidate the process once and for all. “We will look carefully at these recommendations because we are convinced that this will be necessary for us to have a prudent and balanced assessment of the information provided in order to truly assess each element and therefore take the best decision for the Organization,” he said. Mexico reiterates its support for management reform and with that the annual budget cycle as a substantive element in this process. The annual budget cycle has shown its usefulness and relevance in improving programme guidance, resource planning, the implementation of mandates and results-based management.
JAKE SHERMAN (United States) said that Member States cannot revert to a biennial budget if they intend to move the Organization into the twenty-first century. There have been substantial benefits realized over the three years of the trial period – benefits that provide a sound basis to make permanent the annual budget without delay, he added. The annualized budget has had a positive impression on programme managers, who better see the link between the budget and the results they are working to achieve. The annual budget also enables the United Nations to adjust more quickly to evolving demands in a rapidly changing world. The Organization was undoubtedly better able to respond to the COVID‑19 pandemic with a more agile planning and budgeting process, he said. Moreover, the annual programme budget promotes greater transparency and accountability, and its comprehensiveness enables the General Assembly to visualize the linkage between resources and results. Any discussion on sequencing should be based on the fact that the Secretary-General’s annual budget reforms are the only rational path forward for the Organization, he said, adding that “reforms should be improved upon, not undone”.
CHENG LIE (China), aligning himself with the Group of 77, said changes to any budget cycle are an important part of the Secretary-General’s management reform. His delegation supports efficiency, accountability and transparency. Any changes to the budget model should be scientific. The annual reform budget model should follow the leadership of Member States. He pointed out that the annual budget cycle trial was done against the unusual backdrop of the pandemic and liquidity crisis. Many problems emerged and the results have been far from satisfactory. The programme budget results are no longer based on programme planning. The workload of the Fifth Committee, the Committee for Programme and Coordination and the Advisory Committee have multiplied and there is a lack of internal coordination. Human resource issues had to be pushed back from the regular budget year to the Fifth Committee’s resumed session. Results are elusive and problems have yet to be accurately dealt with. He supported the Advisory Committee’s recommendations. Adequate and balanced information must be provided, he stressed. The budgetary cycle is a complicated structural issue and any hasty moves will be counterproductive. The trial of the annual budget should be assessed truthfully, the risks must be identified and all concerns must be considered. A budget model that makes sense is needed, he affirmed.
MICHEL TOMMO MONTHE (Cameroon), associating himself with the African Group, described the ACABQ’s report as the Fifth Committee’s compass. What is important is not the budgetary cycle but rather its content and what can be achieved. The proper definition and approach is to consider the situation as well as the consequences of the Fifth Committee’s predecessors in 1974 when they opted for a programme budget instead of an expenditure-based budget. They, he noted, determined that a temporal planning horizon of two years was preferable. Challenges of an annual workload, as confirmed by the Secretary-General and outlined by the ACABQ, include an increased workload for the Committees and Secretariat, liquidity management and sequencing. If Member States surmount the obstacles to these issues, it is of little importance whether the budget is implemented in one year or two, he contended. On the Secretariat’s growing workload, he called on the Secretary-General to organize these circuits as well as to recruit, train and consistently and continuously recycle staff and civil servants. The Secretary-General should also state the measures he intends to adopt if the annual budget cycle for the Organization breaks with those of other system agencies. He then highlighted the need to build capacity and ensure continuous representation in intergovernmental processes. Regarding the utilization of funds, he noted that the non-use of credit and the persistent lack of engagement should not reduce the drafting of subsequent budgets. As planning, programming, budgeting and oversight should be carried out in one year, the outline, programme and budget section should be better targeted and more clearly elaborated. Uploading should also be avoided, he added.
MS. FONINA (Russian Federation) pointed out that even if the Fifth Committee decides to revert to a biennial budget, the budget for 2023 would still be an annual budget. Member States must carefully, closely and impartially study all of the advantages and disadvantages of the Secretary-General’s reform at the administrative and budgetary levels, she urged. On advantages, she expressed her regret that Member States have continued to base themselves on slogans that the annual budget makes for “budget adaptability in a quickly evolving context”. The Secretary-General’s report, however, does not provide concrete evidence or the necessary analysis of this. Turning to disadvantages, she noted that Member States were assured in 2017 that the transition would be cost neutral. Each budget since 2020 has confirmed that this was not the case. The Secretariat’s workload has doubled; sequencing was disturbed; and the financial, administrative and procedural implications of both cycles were not analysed. Flexibility, a main proclaimed advantage of an annual budget, has not been borne out, she added while underlining the doubts of the ACABQ.
NACI YILDIZ (Türkiye), noting that the annual budget cycle is a core element of the Secretary-General’s management reforms, spotlighted the positive outcomes during the trial period concerning the COVID‑19 pandemic and the Organization’s financial liquidity situation. An annual budget enables the United Nations to be more results-oriented and to swiftly adapt to the new mandates and changing demands. Welcoming the nearly 15 per cent increase in new mandates as a result of a shorter cycle, he pointed out that Member States in the Fifth Committee are in a better position to assess the relationship between resources and results as well as the link between plans and performance. As Türkiye believes the many achievements under the annual programme budget cycle in the last three years should continue, he voiced his country’s support to the Secretary-General’s move to an annual budget cycle and his request to lift the trial period as of 2023.
PEDRO LUIS PEDROSO CUESTA (Cuba), aligning himself with the Group of 77, expressed concern with the late consideration of the issue and questioned how such an important issue for the Organization’s administrative functioning can be presented at the end of November when mandated previously. He hoped this delay would not impact the outcome of the process, which aims to make the Organization’s work more dynamic through management reform. Any changes in the frequency of the budget must respect the primacy of the international Organization’s intergovernmental character. Concerned that the annual budget cycle that was established on a trial basis has shown many inconsistencies, he said the delegation has indicated every year that the budget preparation does not follow the sequencing that is a part of documents and Assembly resolutions. The programme budget over the last three years has not been derived from a previously approved programme plan, he said. It is unacceptable that the current procedure removes the primacy given to the Committee for Programme and Coordination, which has been undermined in practice because its recommendations are considered untimely. Cuba has repeatedly called for a solution to this shortcoming and believes one is possible. The success of the reform depends on remaining delegations, and the leadership of the Secretariat, understanding the need to resolve the issue, he said, adding that Cuba will work to find a balanced solution.
Ms. POLLARD, thanking delegations for their contributions, acknowledged their concerns on sequencing, namely the interactions between the ACABQ, Committee for Programme and Coordination and the Assembly. This is not an issue the Organization has disregarded or taken lightly, she assured. The Secretary-General’s sequencing report presented scenarios including the advantages and disadvantages of an early Committee for Programme and Coordination and a budgetary cycle where the ACABQ consider the post and non-post requirements in part III on the basis of programme plans reflected in part II which have been approved by the Assembly. While the Assembly did not take action on this report, she nevertheless welcomed the additional guidance Member States gave on the role of the Main Committees. To that end, she said she is working with the Fifth Committee secretariat, the Office of the President of the Assembly and the secretariats of the other Main Committees to implement this promptly.
She then welcomed continued conversations with Member States to alleviate existing concerns while maintaining the annual frequency of both programme plans and budgets. Turning to the calls for a strengthened Committee for Programme and Coordination, she noted the request for more robust interaction between that body and the Economic and Social Council. Obtaining Member States’ guidance for the continuation of the annual budget remains a priority for the Organization, she reiterated.
Programme Planning
PHILIPPE KRIDELKA (Belgium), Committee Chair, then drew the Committee’s attention to the letters of the Chairs of the Third Committee (Social, Humanitarian and Cultural) (document A/C.5/77/11) and the First Committee (Disarmament and International Security) (document A/C.5/77/12) on programme planning.
Administration of Justice
Mr. KRIDELKA (Belgium), Committee Chair, also drew the Committee’s attention to a letter from the President of the Assembly which contains a letter of the Chair of the Sixth Committee (Legal) on “Administration of justice at the United Nations” (document A/C.5/77/17).