Proposal to Streamline Administrative Services Draws Mixed Reviews as Budget Committee Examines Feasibility, Cost-Effectiveness of Shared Support Centres
Delegates in the Fifth Committee (Administrative and Budgetary) today gave mixed reviews of the Secretary-General’s plans to consolidate the United Nations fragmented administrative services, which if properly implemented, would improve its ability to serve global duty stations and field offices through a leaner, more effective and cost-efficient structure.
Yukio Takasu, Under-Secretary-General for Management, presenting the Secretary-General’s report on the Global Service Delivery Model, said he had worked with the Under-Secretary-General for Field Support to develop a model that would deliver high-quality, timely and standardized administrative services across the global Secretariat, including peacekeeping.
He said human resources, payroll and accounts payable would be initially consolidated into six main administrative service providers in Bangkok, Entebbe, Geneva, Nairobi, New York and Vienna. Leveraging existing shared arrangements for field missions would improve service delivery, while also realizing economies of scale by consolidating administrative support at the Regional Service Centre at Entebbe. The Americas region would be serviced out of a shared centre in New York. To make the Organization more efficient, “we need the support of the Fifth Committee,” he said.
In the ensuing discussion, delegates had differing opinions of the proposal, with many requesting more clarity on a number of issues. Chad’s representative, on behalf of the African Group, expressed concern that the six locations were among the most expensive duty stations, which defeated the purpose and would not reduce the resources required for service delivery. He hoped that most of the host sites would be located in Africa, where 70 per cent of peacekeeping missions were based. The report did not provide a through realignment of all regulations, rules and procedures, he stressed.
Thailand’s representative, on behalf of the “Group of 77” developing countries and China, said a new service delivery model should consider the lessons learned from ongoing business transformation projects and be built on existing infrastructure and expertise. She expressed concern that the Secretariat relied on professional service firms to implement most central improvement initiatives, such as Umoja, the Organization’s enterprise resource planning project. If urgent actions were not taken, the new model would inherit the same situation.
Switzerland’s delegate, also speaking for Liechtenstein, said the goal of creating a global Secretariat should be more ambitious, and consider the wider aspects of United Nations operations. A service delivery model could not be separated from programme activities if the aim was to put in place a more coherent plan for supporting the effective delivery of mandates. Where feasible, synergies between Secretariat support arrangements and those of the funds, programmes and specialized agencies should be better used.
On a related point, the European Union’s representative said the Model and Umoja would be mutually reinforcing. While Umoja standardized and automated business processes, the Model would consolidate fragmented administrative structures within and across duty stations. It was essential to unlocking the real benefits of Umoja.
If implemented properly, added the United States delegate, the Model would streamline service delivery into shared centres, making the Organization fit for purpose. While some elements merited careful analysis, it was critical to provide the mandate and resources for the Model’s development so that the reform agenda would be fulfilled.
Ethiopia’s delegate expressed regret that neither a cost-benefit analysis nor a clear business case for the Model had been outlined. The global service delivery location was a critical matter and it was important to know why one duty station was preferred over another. High-cost duty stations should not be considered preferable unless there was an otherwise convincing reason.
Along similar lines, Kenya’s representative said the Secretary-General’s report contained inadequate information. He considered the phased approach to implementing the Model a “work in progress” and anticipated further proposals. He requested information on how the two shared services centres would be selected. He expressed support for any reform initiative that enhanced United Nations offices located in the global South.
Carlos Ruiz Massieu, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) introduced its related report on the Model, noting that the Secretary-General’s proposals needed further refinement.
Also today, delegates took up the financial reports and audited financial statements of the Board of Auditors for the year ended 31 December 2015. The Board’s reports were introduced by Salhina Mkumba, Director of External Audit of the United Republic of Tanzania and Chair of the Board’s Audit Operations Committee. Ms. Tucci introduced the Secretary-General’s related reports, while ACABQ Vice Chair Babou Sene introduced that entity’s report on the matter.
Delegates also considered the financing of the International Criminal Tribunals for Rwanda and the former Yugoslavia, and International Residual Mechanism for both Tribunals for the biennium 2016-2017. Ms. Tucci introduced the Secretary-General’s report on the final budget performance report for those bodies, while Mr. Ruiz introduced the Advisory Committee’s related report.
Finally, delegates considered the programme budget implications of draft resolution A/71/L.25 titled, “Investigation into the conditions and circumstances resulting into the tragic death of Dag HammarskjAlld and of the members of the party accompanying him”. The Secretary-General’s statement on the matter was introduced by Ms. Tucci.
The representatives of Japan and the Russian Federation also spoke.
The Fifth Committee will reconvene at 3 p.m. on Wednesday, 14 December to discuss the 2016-2017 programme budget for special political missions and financing of the United Nations Operation in CAte d’Ivoire (UNOCI).
2016-2017 Budget Implications: Dag HammarskjAlld Investigation
BETTINA TUCCI BARTSIOTAS, Assistant Secretary-General, Controller, Office of Programme Planning, Budget and Accounts, introduced the Secretary-General’s statement (document A/C.5/71/14) on the programme budget implications of draft resolution A/71/L.25 titled, “Investigation into the conditions and circumstances resulting into the tragic death of Dag HammarskjAlld and of the members of the party accompanying him”.
She said should the text be adopted, the Secretary-General proposed $329,300 in additional resources for its implementation, including for an eminent person to review the potential new information, assess its probative value, determine the scope that any further inquiry or investigation should take and, if possible, draw conclusions from the investigations already conducted. Those resources would fall under section 1, Overall policymaking, direction and coordination of the programme budget for the biennium 2017-2017, and be charged against the contingency fund.
CARLOS RUIZ MASSIEU, Chair, Advisory Committee on Administrative and Budgetary Questions (ACABQ), introducing its eponymous report (document A/71/668), said that given that the details of the travel itinerary for one consultant were unclear, the Advisory Committee was not convinced that a basis existed for calculating the travel resources for consultants. Therefore, it recommended a reduction of $3,000, or 10 per cent, in those resources and approval of the remaining $326,300 in proposed resources.
2016-2017 Programme Budget: Global Service Delivery Model
YUKIO TAKASU, Under-Secretary-General for Management, introduced the Secretary-General’s report on the Global Service Delivery Model for the United Nations Secretariat (document A/71/417). While the Secretariat had been implementing management reforms in recent years, the administrative support structure lagged behind. Administrative services across the Secretariat were highly fragmented, delivery was inconsistent and efficiency could be improved.
The Global Service Delivery Model provided an opportunity to consolidate the Secretariat’s fragmented administrative service structures, he said, noting that decision-making would continue to be decentralized. The Model aimed to empower managers to better manage their programmes. By consolidating the administrative transactional processing required to implement those decisions through shared services centres, programme managers would be better equipped to carry out their mandates.
He said he had worked with the Under-Secretary-General for Field Support to develop a single Secretariat model that would deliver high-quality, timely and standardized administrative services across the global Secretariat. Given the broad nature of the work, a minimum of two locations with capacity to operate critical functions was necessary for business continuity. To reach the end-state locations, a phased approach was being proposed, she said, noting that a transition phase of initial consolidation was proposed in 2018-2019 (Phase I), in order to achieve the end-state two locations in 2020-2021 (Phase 2).
He said the Secretary-General had proposed initial consolidation in 2018-2019 of human resources administration, payroll and accounts payable into six duty stations of main administrative service providers, in order to leverage existing capacity in different regions as a transition phase. The six duty stations – Bangkok, Entebbe, Geneva, Nairobi, New York and Vienna – had experience in providing remote shared services, and the proposed changes in 2018-2019 represented an important transition phase that would prepare staff for implementation of global shared services in 2020-2021. Client support desks at service centres and major duty stations would serve as a single entry point for clients.
The current arrangements for field missions included a range of service delivery models, he said. Leveraging existing arrangements would foster standardization to improve service delivery, and realize economies of scale, with further consolidation of administrative support services at the Regional Service Centre at Entebbe. In 2018-2019, Phase 1 would entail an incremental transfer of the administrative support services within missions to that Regional Centre. Missions in the Americas region would be serviced by the shared centre in New York, which would be organized into service lines representing end-to-end administrative processes. Services would include human resources administration and payroll, accounts payable, travel, travel claims and ticket payment processing. For 2020-2021, the Secretary-General proposed consolidation of those services into two shared centres.
In terms of change management, he said the Model’s success would depend on strong commitment among senior leadership, effective project management and open communications. “It is undeniable that many managers in the Secretariat would prefer to maintain the status quo,” he said, “even if that means less than optimal service to staff, continued inefficiency and additional costs to Member States. “We, as agents of change, have to guide those managers to put the Organization’s interests first,” he stressed.
The United Nations had reached a turning point, he said, noting that implementing the Model required the Fifth Committee’s support. Resources were being requested for the project management team, without which, the Secretariat would not be in a position to develop the organizational design and change management for the Model.
To implement Phase 1 in 2018-2019, he said the Fifth Committee should invite the Secretary-General to include detailed proposals in the respective budgets, which would provide an opportunity to consider proposals next year. “Alignment with the budgetary cycles is crucial,” he said, stressing that the prolonged continuation of redundant administrative structures, such as running payroll from 10 locations despite one global system, could no longer be justified. To realize the Model’s benefits, the Organization must move beyond what was already taking place. He sought the Fifth Committee’s continued support.
Mr. RUIZ, ACABQ Chair, introducing its related report on the Model, said the Secretary-General’s report did not provide complete information for decision-making by the General Assembly and his proposals needed further refinement and development in a number of areas. On the global service delivery assessment, there was a need for a comprehensive and detailed inventory of the 201 location-independent administrative processes that could potentially be considered for consolidation into shared service arrangements. In that vein, he also highlighted the need for a uniform approach to the delivery of administrative services across all parts of the Secretariat based on a harmonised catalogue of administrative services. Regarding the business case, he said that the data quality needed to be improved and detailed information should be provided on the underlying methods and assumptions made in the development of the full-time equivalent analysis.
Given the scale and scope of the proposals, the capacity of the Organization to simultaneously implement another major business transformation initiative must be taken into account, he said. At the same time, the Model was closely linked to Umoja and needed to fully realize Umoja’s potential benefits. As a result, it was in the best interest of the Organization to adopt a more sequential approach to implementing the first phase of the Model, with implementation at a limited number of locations rather than at all six locations concurrently. Such a pragmatic approach would allow the Secretariat to fully develop its proposals while providing an opportunity to test the Model in a pilot environment. It would also allow the United Nations to more gradually absorb the significant organizational changes that would undoubtedly result from the consolidation of administrative services.
SIRITHON WAIRATPANIJ (Thailand), speaking on behalf of the “Group of 77” developing countries and China, said that business transformation initiatives should be supported as long as they improved service delivery to Member States and mandate implementation. The Group also noted that the rationale for a new service delivery model was aimed at responding to increasing complexities in the administrative structures, policies, procedures and delegations of authority in the Organization. The Group regretted that the Secretary-General’s report did not provide complete information for decision-making by the General Assembly. The Group had also expected a concrete business case which included an end-state vision, clear goals and objectives and a detailed cost-benefit analysis containing information on qualitative and quantitative benefits.
She emphasized the need for the development of a model to fully take into account the experience and lessons learned from the ongoing and concluded business transformation projects such as Umoja, staff mobility and the Global Field Support Strategy. Any new revised proposal should avoid duplication or overlapping of the functions and should be built, to the extent possible, on existing infrastructure and expertise, including those available at offices away from Headquarters and in field missions. The Group also expressed concern over how the Secretariat was reliant on professional service firms to implement the majority of central improvement initiatives, especially in organizational change management in projects such as Umoja. If urgent and comprehensive remedial actions were not taken, the Global Service Delivery Model would inherit the same situation.
BACHAR BONG ABDALLAH (Chad), speaking on behalf of the African Group and aligning himself with the Group of 77 and China, expressed concern that the six locations included in the initial consolidation of services were among some of the most expensive duty stations. That defeated the very purpose and principals on which the Model was based and would not lead to the reduction of resources required for service delivery. With that in mind, the Fifth Committee would evaluate the options proposed by the Secretary-General and evaluate whether the suggested locations would in fact help the Organization reduce its operational costs. However, he noted that the assessed outcomes included in the report were not comprehensive, which made it impossible to reach a clear conclusion. Given that such an approach would not lead to meaningful quantitative benefits, the proposal should be revised to provide greater detail.
As the General Assembly had reiterated that the proposal should take into account the use of existing United Nations infrastructure, he hoped that the majority of the host sites for the provision of support services would be located in Africa, where 70 per cent of peacekeeping missions were based. In that connection, he stressed the importance of consolidating the Global Field Support Strategy with the support services of the Department of Peacekeeping Operations and Department of Field Support before attempting to extend them to the entire Secretariat. In conclusion, the report fell short on meeting the General Assembly requirements as it did not provide a through realignment of all regulations, rules and procedures.
ALEXANDRA BAUMANN (Switzerland), also speaking on behalf of Liechtenstein, said the objective should be to efficiently and effectively provide programmes with high-quality, timely and standardized administrative services across the Secretariat. The Secretary-General’s goal of creating a truly global Secretariat should be more ambitious and take into account wider aspects of the United Nations operations. A service delivery model could not be separated from programme activities if the aim was to put in place a more coherent plan for supporting the efficient, effective delivery of mandates. The Model also provided an opportunity to review potentially outdated or redundant organizational structures.
It should also be considered, where meaningful and feasible, to better use synergies between the administrative support arrangements of the Secretariat and those of the funds, programmes and specialized agencies, she said. Encouraging the Secretary-General to build on existing hubs and shared service centres which benefited from economies of scale and had a proven record of delivering high-quality services, she said it was important to ensure close coordination and synchronisation with all ongoing management reform initiatives, including Umoja. It was particularly critical to ensure that Umoja Foundation and Extension 1 processes were fully stabilized and operational for the implementation of the Model.
SIMONA PILLERI, European Union, said that the Model would be an essential element that created synergies and ensured faster, more efficient service delivery with qualitative and quantitative benefits. It was clear that the Model and Umoja would be mutually reinforcing: while Umoja standardized and automated business processes, the Model would consolidate fragmented administrative structures within and across duty stations. The Model was essential to unlocking the real benefits of Umoja. The overall aim of the exercise was to concentrate resources on substantive frontline activities making the Organization leaner and more effective. That would improve the quality of mandate implementation as well as free resources that could translate into considerable efficiency gains for the Organization and its Member States.
Noting that the Secretary-General’s current report set out the overall vision, methodology, rationale and broad concepts for Model, she said it should therefore be seen as a step in the development of a template that would enable the United Nations to dedicate a greater percentage of resources to substantive frontline activities while making administrative functions more efficient and therefore better able to serve the Secretariat’s evolving needs. It should also maximize benefits and avoid possible duplication and overlap while taking into account the unique and complex nature of the United Nations system.
CHERITH NORMAN CHALET (United States) said that while the United Nations had begun to see the benefits of transformational management initiatives, such as Umoja and the International Public Sector Accounting Standards, more work must be done, as the real potential of those tools was to foster more effective ways of doing business. If implemented properly, the Model had the potential to bring those various initiatives together, allowing the Organization to streamline and consolidate administrative services across the Secretariat and in locations that made the most economic sense. The use of real-time data would make mandate execution more effective, through better procurement and asset management. The Model would streamline service delivery into shared centres, making the Organization fit for purpose, while ensuring accountability and budget discipline. While there were elements outlined in the reports that merited careful analysis – including how best to meet the specialized needs of field operations – it was critical to provide the mandate and resources for continued development of the Model, so that the premise of the reform agenda would eventually be fulfilled.
MAHLET HAILU (Ethiopia) said that considering the need to provide a detailed cost-benefit analysis for the Model, he regretted that the Secretary-General’s report contained neither such an analysis nor a clear business case. The global service delivery location was a critical matter and should be examined in detail on the basis of solid empirical data. It was also important to know why one duty station was preferred over another. The choice of a proposed duty station should have a logical and scientific link to the assessment conducted. High-cost duty stations should not be considered preferable unless there was a very convincing reason for taking such a course of action. It was also important to consider cost-driven hard facts and proper balancing of costs and risks. On the proposal to consolidate services into six locations, he said that approach would not lead to meaningful quantitative benefits and therefore it should be reconsidered. He also regretted that the Secretary-General’s report did not provide detailed indications on how the specific clients’ needs of the various Secretariat entities, especially the regional commissions which would adopt the Model at the initial stage, had been taken into consideration.
ROBERT NGEI MULE (Kenya), associating himself with the Group of 77 and China, and the African Group, said the Secretary-General’s report contained gaps. Information was inadequate in many respects and, as shown in various sections, much more reflection would be done by the Secretariat to further shape the proposal. The report proposed a phased approach, the first phase of which would be implemented in 2018-2019 to consolidate administrative services into two regional service centres. He considered that concept a work in progress and anticipated further proposals in that regard. The criteria for location assessment was important, he said, requesting information on how the two shared services centres would be selected. The United Nations had been implementing many reforms over the years and Kenya favoured an implementation environment that was devoid of duplication and offered opportunities to learn from experience and best practices. It was important to adopt a sequential approach to implementing the Model. That approach, which would be on a pilot basis, could be the most ideal mechanism to undertake a major business transformation initiative. He expressed support for any reform initiative that enhanced United Nations offices located in the global South.
Financing of International Criminal Tribunals and Residual Mechanism
Ms. TUCCI, Assistant Secretary-General, Controller, Office of Programme Planning, Budget and Accounts, introduced the Secretary-General’s reports on the final performance report on the budget of the International Criminal Tribunal for Rwanda for the biennium 2016-2017: liquidation (document A/71/577); first performance report of the International Tribunal for the Former Yugoslavia for the biennium 2016-2017 (document A/71/578) and the first performance report of the International Residual Mechanism for Criminal Tribunals for the biennium 2016-2017 (document A/71/579).
She said the purpose of Rwanda Tribunal performance report was to provide an estimate of the final level of resources required for 2016-2017, while the objective of the latter reports was to identify adjustments required due to variations in inflation and exchange rates, standard costs, as well as vacancy rates assumed in the calculation of the initial appropriations. In that context, the estimated final level of expenditures for the liquidation period of the Rwanda Tribunal totalled $5.8 million, a net increase of $3.7 million over the initial appropriation for 2016-2017. That increase primarily reflected the additional requirements under staff costs, and the Secretary-General proposed to transfer the increase as a charge to the 2016-2017 budget of the Residual Mechanism.
The revised estimates for the Former Yugoslavia Tribunal amounted to $98.1 million, an increase of $2.3 million over the initial appropriation and the result of the depreciation of the United States dollar against the Euro, as well as the adjustments to standard salary and common staff costs, she said. The revised estimates for the Residual Mechanism totalled $135.7 million, a decrease of $1.7 million over the initial appropriation reflecting adjustments to standard salary and common staff costs as well as favourable inflation rates.
Mr. RUIZ, ACABQ Chair, introduced the Advisory Committee’s related report (document A/71/671) on the final performance report on the budget of the International Criminal Tribunal for Rwanda Tribunal and first performance reports of the International Tribunal for the Former Yugoslavia and the International Residual Mechanism for Criminal Tribunals for the biennium 2016-2017.
With respect to the liquidation of the Rwanda Tribunal, he expressed concern that the final level of expenditure for 2016-2017, $5.8 million, would be nearly three times as much as the level of the appropriation. The magnitude of the write-offs and overpayments was unfortunate and could have been partially avoided, he said, noting that measures should have been in place to ensure their prompt recovery prior to the Tribunal’s liquidation. At the same time, the explanations provided for extending the duration of the Tribunal’s liquidation phase had not been made known to the General Assembly until the latest Secretary-General report, document A/71/577, while the decision on that issue had been taken much earlier in the year.
Turning to the first performance report of the Former Yugoslavia Tribunal, he noted the projected variances, including an increase of almost $3.8 million related to the exchange rates largely attributable to the weakening of the United States dollar against the Euro. He expressed hope that the most recent figure would be used to determine the forecasted exchange rates and that relevant information would be provided to the General Assembly at the time of the consideration of the report. On the first performance report of the Residual Mechanism, he said that technical adjustments would result in a more than $1.6 million decrease in resource requirements and that the revised appropriation for 2016-2017 would amount to approximately $135.7 million.
SIRITHON WAIRATPANIJ (Thailand), speaking for the Group of 77 and China, said the Group had taken note that, regarding the Tribunals for Rwanda and the former Yugoslavia, and the Residual Mechanism, the Board of Auditors had issued unqualified audit opinions on the financial statements for the year ended 31 December 2015. Those bodies must implement all the Board’s recommendations in a timely manner.
Regarding the Rwanda Tribunal, she noted the projected $5.8 million in final spending, a $3.7 million increase, which represented a 179 per cent from approved appropriations, and attributed to over expenditure under staff costs, education grant advances and extension of the liquidation period by two months. She expressed concern over inaccurate forecasts of the requirements related to education grant advances, and separation entitlements, reflecting the weak management of liquidation planning and implementation. Lessons learned from the liquidation planning and implementation should be considered in the future. All claims for local service providers must be settled and rental facilities returned to tenants. She requested details on the financial rules and regulations related to the proposed transfer of the $3.7 million from the Rwanda Tribunal to the Residual Mechanism.
On the Former Yugoslavia Tribunal, she said the Group had taken note of the proposed $98 million revised appropriation, a $2.3 million increase from the initial figure, resulting from exchange rate adjustments, and the standard salary and common staff costs. The $135.8 million revised appropriation for the Residual Mechanism reflected a $1.7 million decrease from the initial appropriation, attributed to inflation assumptions, and standard salary and common staff costs adjustments. As the $3.7 million in over-spending related to the Rwanda Tribunal had not been reflected in the revised appropriation for the Residual Mechanism, she requested clarity on that matter.
NOBUKO IWATANI (Japan) expressed regret over the magnitude of difference or deviation of the estimated final expenditure of the Rwanda Tribunal, and deep concern with the ACABQ observation on the inaccurate forecast of the requirement, weak management and lack of internal control and accountability. He also expressed regret that significant overpayments had been left “for a long time”. Noting that Japan had supported the Tribunals, he said administrative and financial management during liquidation phase should be maintained, with corrective measures taken as necessary. He requested more information on the matter.
DMITRY PODLESNYKH (Russian Federation) took note of the Secretary-General’s reports on the International Tribunals for Rwanda and the former Yugoslavia, and the Residual Mechanism, expressing serious concern about the sharp increase in resource requirements for the Rwanda Tribunal. The Secretariat had not acted efficiently when drawing down that body. Forecasting related to educational grant advances and separation entitlements reflected weak management, internal oversight and accountability. Despite a clear mandate to conclude the Residual Mechanism’s work in May, it had been extended by two months, the reasons for which should be carefully analysed. Such overruns for approved final budget estimates should not be repeated. In that context, he drew attention to respect for the rules of procedure on financial management and human resource management in drawing down the Former Yugoslavia Tribunal. It was unacceptable that transferring its functions to the Residual Mechanism should give rise to other functions. He was ready to discuss that and related issues in informal consultations.
Financial Reports and Audited Financial Statements of Board Auditors
SALHINA MKUMBA, Director of External Audit of the United Republic of Tanzania and Chair of the Audit Operations Committee of the Board of Auditors, introduced the Board’s financial reports and audited financial statements for the year ended 31 December 2015 as follows: United Nations (document A/71/5 (Vol. I), International Trade Centre (document A/71/5 (Vol. III) ), United Nations University (document A/71/5 (Vol. IV)), Capital Master Plan A/71/5 (Vol. V)), United Nations Development Programme (UNDP) (document A/71/5/Add.1), United Nations Capital Development Fund (UNCDF)(document A/71/5/Add.2), United Nations Children’s Fund (UNICEF) (document A/71/5/Add.3), United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) (document A/71/5/Add.4), United Nations Institute for Training and Research (UNITAR) (document A/71/5/Add.5), Voluntary funds administered by the United Nations High Commissioner for Refugees (document A/71/5/Add.6), Fund of the United Nations Environment Programme (UNEP) (document A/71/5/Add.7), United Nations Population Fund (UNFPA) (document A/71/5/Add.8), United Nations Human Settlements Programme (UN-HABITAT) (document A/71/5/Add.9), United Nations Office on Drugs and Crime (UNODC) (document A/71/5/Add.10), United Nations Office for Project Services (document A/71/5/Add.11), United Nations Entity for Gender Equality and the Empowerment of Women (UN-Women) (document A/71/5/Add.12), Rwanda Tribunal (document A/71/5/Add.13), Former Yugoslavia Tribunal (document A/71/5/Add.14), Residual Mechanism (document A/71/5/Add.15) and the United Nations Joint Staff Pension Fund (document A/71/5/Add.16). He also introduced the Secretary-General’s note (document A/71/558), transmitting the Board’s concise summary of the principal findings and conclusions contained in its reports for the annual financial period 2015, and the Secretary-General’s report on implementation of the recommendations of the Board of Auditors contained in its report on the capital master plan for the year ended 31 December 2015 (document A/71/331).
He noted that nine entities had reported surpluses and nine had recorded deficits. All 18 entities had demonstrated solvency as they were able to meet their long-term liabilities. Meanwhile, the aggregate amount of the employee benefit liabilities had decreased by 7 per cent in 2015 from $ 11.34 billion to $10.58 billion and the liability in untaken leave had decreased from $770.61 million to $714.29 million over the same period. Those liabilities would begin to consume an increasing portion of resources and could present challenges should an entity shut down or significantly reduce its programmes, he cautioned.
He went on to identify scope for improvement in the management of programmes and projects, in particular those delivered by implementing partners, highlighting recurring delays in the financial closure of projects for some entities – including UNDP, UNCDF, UNFPA – and UN-Women for projects that were closed operationally. Some entities were taking measures to strengthen the human resources function. Nonetheless, the Administration had made limited progress in addressing the Board’s previous recommendation that it develop a medium to long-term strategic workforce strategy and operational workforce plans. He also noted areas of improvement in the asset management of some entities. On travel management, effective steps were needed to enforce and monitor compliance with the advance purchase policy. He also touched upon major business transformation projects such as the Capital Master Plan and Umoja. In that regard, there had been evidence of a strong commitment to reform and significant progress in implementing centrally-driven initiatives.
Overall, 210 recommendations of the 515 recommendations from 2014 had been fully implemented, he said. That represented a decrease in the implementation rate compared to the previous year, during which 49.6 percent of past recommendations had been fully implemented. The rise in unimplemented recommendations varied but could be attributed in part to the demands of effecting Umoja and the length of time needed to change certain policies or introduce system controls.
Ms. TUCCI, Assistant Secretary-General, Controller, Office of Programme Planning, Budget and Accounts, introduced the Secretary-General’s reports on implementation of the recommendations of the Board of Auditors contained in its reports on the United Nations funds and programmes for the year ended 31 December 2015 (document A/71/331/Add.1 (Part I) and (Part II)), and his report on implementation of the recommendations of the Board of Auditors contained in its report on the United Nations for the year ended 31 December 2015 (document A/71/331/Add.2).
Concerning the reports on the funds and programmes, the Executive Heads had concurred with all but two of the Board’s recommendations and had made every effort to ensure compliance with the General Assembly’s request to the implementation of the Board’s recommendations. In terms of the latter report, she confirmed that the Administration had accepted all of the Board’s recommendations. With regards to the Secretariat, 54 percent of the 166 recommendations relating to the previous four financial periods had been fully implemented while 33 per cent were currently under implementation.
BABOU SENE, ACABQ Vice Chair, introduced the Advisory Committee’s report on the financial reports, audited financial statements and reports of the Board of Auditors for the year ended 2015 for 20 entities of the United Nations system (document A/71/669). He expressed regret that the financial statements of 11 entities were submitted two months late due to challenges associated with the implementation of Umoja. As such, the Advisory Committee was unable to provide its audit report in a timely manner and in all six official languages. All entities had received unqualified audit opinions from the Board of Auditors. However, he was concerned that the implementation rate of the Board’s recommendations had continued to decrease and called for a follow-up mechanism in monitoring their implementation. On the question of disclosures of fraud, he agreed that there may be underreporting in the United Nations system and expressed concern that the Board was not in a position to provide assurances that the numbers reported and disclosed by management were indeed reliable.
Ms. WAIRATPANIJ (Thailand), speaking on behalf of the Group of 77 and China, expressed disappointment over the delay in finalizing the financial statements, which had led to delayed consideration of the reports. The Group had taken note that Umoja had contributed to that delay, she said, stressing that future financial statements must be submitted in line with the established timeframe and United Nations Financial Rules and Regulations. All the audited entities had been issued unqualified audit opinion, and there was a need for them to sustain the gains achieved, and address weaknesses.
All 19 entities had shown solvency and an ability to meet long-term liabilities with a 1-to-1 ratio, considered to be a sound indicator of financial sustainability, she said, noting that some entities had lower liquidity ratios. She expressed serious concern about the financial position of the UNRWA, which had moved from “fair” to “unstable” and “unpredictable” due to insufficient cash to finance core current liabilities.
More broadly, she said that only 210 of the Board’s 515 recommendations for peacekeeping operations – or 41 per cent – up to the year 2014 and to June 2015 had been implemented, down from the 49.6 per cent implementation rate in the previous period. All entities must ensure that those recommendations were implemented and there was an accountability arrangement in place for delays. On business transformation, she noted with concern that several initiatives had not been properly planned and implemented, stressing that all entities must establish a formal approach to improving operations and enhancing capabilities to coordinate projects by defining clear benefit-realization plans and implementation timeframes. She would request details on travel spending across the entities during informal consultations. She agreed on the need for an information sharing mechanism across all entities with a view to applying best practices. She would seek clarity on measures to address weaknesses identified by the Board in UNRWA, UNICEF, UNHCR and the Residual Mechanism.
Ms. BILLERI, European Union, expressed regret over the late issuance of the ACABQ report, stressing that timely and simultaneous submission of required documentation in all official languages was essential for achieving the transparency needed to reach a negotiated outcome. The Board’s unqualified audit opinions had provided States with independent assessments on the use of their funds, while its reports had helped to improve the United Nations governance, and financial and operational management. He welcomed its findings on the financial position of the Organization, and its financial performance and cash flows as expressed in its latest reports.
While he commended the global implementation of Umoja across the Secretariat in 2015, he noted with concern the Board’s observation that the Administration had not made full use of the new platforms to support decision-making and deliver the promised financial and service-delivery improvements. He agreed on the need for a more harmonized approach to improving operations. He expressed regret that progress on enterprise risk management had been insufficient, noting that the Administration must find a plan for its full implementation. The Organization also must improve the efficiency and strategic focus of its human resource management.
Ms. NORMAN CHALET (United States) noted that all 20 United Nations entities examined by the Board had received unqualified audit opinions, showing both solvency and the ability to meet their long- and short-term liabilities. States could have confidence in both the integrity of the financial statements and the strength of the United Nations financial situation. She welcomed the Board’s conclusions, especially on the need to fully implement and capitalize on new platforms to support management decision-making, and to demonstrate promised financial and service-delivery improvements, including through implementation of Umoja, the International Public Sector Accounting Standards and the Global Field Support Strategy. While those initiatives were an opportunity to transform the Secretariat into a more modern business administration, the United Nations must develop a baseline of current performance and employ the new tools at its disposal to better manage resources and results.
Source: United Nations