19/05/2003
Press Release
GA/AB/3566



Fifty-seventh General Assembly

Fifth Committee (Resumed)

52nd Meeting (AM)


UN MISSION IN DEMOCRATIC REPUBLIC OF CONGO REQUIRES FLEXIBLE BUDGET,

CONTROLLER TELLS FIFTH COMMITTEE


The United Nations Organization Mission in the Democratic Republic of the Congo (MONUC) was a difficult, complex and constantly evolving mission and, as such, required a flexible budget, Jean-Pierre Halbwachs, the United Nations Controller, told the Fifth Committee (Administrative and Budgetary) this morning, as it began consideration of that Mission’s financing.


Introducing several reports related to the Mission’s budget, Mr. Halbwachs said recent events in the Democratic Republic of the Congo had made the task of preparing the budget all the more difficult.  A revised budget for the period 2003-2004, which took into consideration several developments, had been submitted following the Security Council’s expansion of MONUC’s mandate.  Further changes to that mandate were expected, and a new budget would have to be submitted to the Assembly in the fall.  In the meantime, an approved budget, with sufficient flexibility for the establishment of additional posts to meet the urgent and immediate requirements of the Mission’s reorganization, was needed.


[In the initial 2003-2004 budget proposal for the Mission, the Secretary-General had requested some $516.8 million, which reflected a decrease of $65.1 million from previous estimates, mostly due to high vacancy rates, better use of staff and lower requirements for equipment.  Following the Security Council’s expansion of the Mission in December 2002, however, the Mission’s revised budget amounted to some $634.7 million, representing an additional

$118 million from initial cost estimates.]


The Advisory Committee on Administrative and Budgetary Questions (ACABQ) recommended an appropriation of some $582 million for MONUC, its Chairman, Conrad S.M. Mselle, said as he introduced that body’s related report.  The ACABQ continued to experience many difficulties in examining budget estimates for the Mission and its report on the Mission was provisional, pending the submission of a new budget before the end of 2003.


Turning to the budget for the United Nations Mission in Sierra Leone (UNAMSIL), Mr. Halbwachs said that Mission’s budget reflected a downsizing in accordance with Security Council resolution 1436 of 2002.  Since the preparation of the budget, the Council had authorized a further reduction of troops from 13,500 to 11,500, resulting in a reduction of some $34 million to the proposed budget.  While a revised budget was not being submitted, the amount had been conveyed to the Advisory Committee for its consideration.


Also this morning, the Committee heard the introduction of several other reports, including the review of rates of reimbursement to the governments of troop-contributing States, the Peacekeeping Reserve Fund and the final write-off of contingent-owned equipment at liquidated missions.  A report on the financial position of 10 closed peacekeeping missions, as well as reports on the disposition of assets for several closed missions, was also introduced.


The Under-Secretary-General for Internal Oversight Services, Dileep Nair, introduced the report of the Office of Internal Oversight Services on the financial situation of the United Nations International Research and Training Institute for the Advancement of Women (INSTRAW).


Participating in a brief discussion on organizational matters were the representatives of Morocco (on behalf of the “Group of 77” developing countries and China), Greece (on behalf of the European Union), the Dominican Republic and Venezuela.  The Committee Chairman, Murari Raj Sharma (Nepal), and the Committee Secretary, Movses Abelian (Armenia), made brief statements during the discussion.


The Committee will meet again at a date to be announced in the Journal.


Background


The Fifth Committee (Administrative and Budgetary) met this morning to continue its consideration of individual peacekeeping missions’ budgets and to take up several reports related to the administrative and budgetary aspects of peacekeeping financing.


The first mission to be considered today was the United Nations Organization Mission in the Democratic Republic of the Congo (MONUC) (document A/57/683).  Its budget proposal of $516.8 million for 2003/2004 shows a decrease of $65.1 million (11.2 per cent), mostly as a result of increased use of staff appointed under contracts of limited duration, higher vacancy rates for civilian personnel and lower requirement for equipment, for much of it was acquired in prior periods.  Also factored in the proposal is a reduction in air transportation requirements.


Since the initial budget had been completed, however, an addendum to the budget of MONUC has been elaborated (document A/57/683/Add.1), following the expansion of the Mission by the Council.  As the mandate of MONUC was expanded, an additional $116.6 million has been proposed for the Mission.  Further changes in the mandate of MONUC are likely, which would require the submission of a new budget in the fall during the main part of the fifty-eighth session.


According to the Mission’s performance report for 2001/2002, in addition to an initial appropriation of $232.12 million, another $41 million was later appropriated by resolution 56/252 C, which had been erroneously reflected before as having been apportioned for the maintenance of the Mission for the period under review.  In fact, by its resolution 55/275, the Assembly had authorized the Secretary-General to enter into commitments in the amount of $41 million, without assessment.  As a consequence, Member States have been credited the unencumbered balance of $26.65 million of the total appropriation of $273.12 million in addition to the excess of expenditure over the assessment in the amount of $14.35 million, resulting in a $41 million shortfall for 2001/2002. 


Therefore, for 2001/2002, it is proposed to offset the amount of $41 million against the unencumbered balance of $61.17 million.  In this case, the resulting balance of $20.17 million should be credited to Member States.  The Assembly is to make a decision on the treatment of this unencumbered balance, as well as other miscellaneous income and adjustments for the period ended 30 June 2002.


Also before the Committee was a separate report on the status of airfield services contract to MONUC (document A/57/756), for the Assembly, in its resolutions 56/252 B of March 2002 and 56/252 C of June 2002, requested reports on the implementation of recommendations in connection with concerns expressed by the Advisory Committee on Administrative and Budgetary Questions (ACABQ) over awarding the contract to PAE/Daher over the lowest bidder.  The contract, which was valid until 30 June 2002, was awarded for an amount not to exceed $34.22 million for one year.


According to the document, the initial contract was subsequently extended until 31 March 2003.  Negotiations with the contractor last November have resulted in a significant reduction of cost and released the Organization from any potential claims under the contract.  In search of a new contract, efforts were made to ensure uninterrupted provision of services to MONUC.  Together with a working group comprising representatives of the Department of Peacekeeping Operations (DPKO), the Office of Internal Oversight Services and the Office of Legal Affairs, MONUC has completed a comprehensive reassessment of its airfield service requirements.  A troop contributors’ meeting was held to elicit offers for specialized military units capable of carrying out all or part of the required services.  Some 86 potential troop contributors have been canvassed, and a market survey of potential local contractors was undertaken.


Following an assessment of all options, a proposal by one bidder was considered superior to all others, both in cost and in substance.  Also, a recommendation was finalized for the distribution of airfields between an international civilian contractor and military contingents.  On 19 December, the case was submitted to the Headquarters Committee on Contracts, which unanimously recommended approval of the proposed award.  The new contract was expected to take effect on 1 April.


The ACABQ report on the Mission (document A/57/772/Add.10) notes that the Secretary-General will be reporting to the Council in May with recommendations for expanding MONUC’s role.  Those recommendations, the Committee was informed, would outline new tasks, in addition to the Mission’s currently mandated tasks, to enable it to support the transitional political process pursuant to the all-inclusive agreement reached on 17 December 2002 by the Congolese parties.  In view of that development, a new budget is to be submitted for consideration before the end of 2003 that would reflect such action as the Council might take.


In the meantime, the ACABQ recommends that MONUC’s budget be maintained at its current level, namely, $582 million gross, and that the staffing table also be maintained at its current level, namely, 1,695 posts.  It requests that all posts be fully justified in the new budget for 2003-2004 in terms of the new concept of operation, organizational structure and workload.  In view of the developing situation, the Advisory Committee has decided not to submit its recommendations in the main part of its report, but to annex a number of significant observations in connection with the consideration of the new budget.


The ACABQ recommends approval of the Secretary-General’s proposal to offset some $41 million unassessed during 2001-2002 period against the unspent balance of $61.2 million for the period ended 30 June 2002.  It also recommends that the remaining balance of $20.2 million, as well as interest and other income and adjustments amounting to some $23 million, be credited to Member States in a manner to be determined by the Assembly. 


Regarding the financing of MONUC for the period from 1 July 2003 to 30 June 2004, the ACABQ recommends that the Assembly appropriate an amount of some $582 million gross (about $572.3 million net), and that that amount be assessed at a monthly rate of $48.5 million gross ($47.7 million net), pending the submission of a new budget for 2003-2004.


As for the United Nations Mission in Sierra Leone (UNAMSIL) (document A/57/681), the proposed budget of $520.05 million represents a decrease of   $149.4 million (22.3 per cent) due to the downsizing of the Mission in accordance with the drawdown plan endorsed by the Security Council and a higher number of mission staff recruited under appointments of limited duration. 


[Introducing a consolidated statement on peacekeeping financing last Monday, United Nations Controller Jean-Pierre Halbwachs said that the Council had since authorized a further reduction of troops from 13,500 to 11,500.  That resulted in a reduction of some $34 million to the budget proposed.  A revised budget was not being submitted, however, as the amount was conveyed to the Advisory Committee for its consideration.  See Press Release GA/AB/3560 of 5 May.]


Regarding the Mission’s performance for 2001/2002 (document A/57/680), the Assembly needs to take a decision on a reduction in the appropriation provided  for the maintenance of the Mission for the period ending on 30 June, from $717.6 million to $676.6 million, corresponding to the amount actually assessed on Member States.  It is also necessary to decide on the treatment of the unutilized balance of $33.35 million based on that reduced appropriation and the treatment of other income/adjustments amounting to some $23.21 million.


Having considered the financial situation of the Mission, the Advisory Committee (document A/57/772/Add.3) recommends that the Assembly approve a reduction in the appropriation for UNAMSIL for 2001/2002 from $717.6 million (provided for in resolution 56/251) to $676.6, corresponding to the amount actually assessed for the period.  The ACABQ also recommends crediting the unencumbered balance of $33.35 million to Member States, along with the income amounting to some $23.21 million.


For the next financial period, the Advisory Committee recommends approval of the Secretary-General’s request for an appropriation of some $520.05 million.  However, in view of the envisioned further reduction of the Mission, it is further recommended that the amount to be assessed, at this time, should not exceed $486 million gross.  The Advisory Committee also notes that it has made some recommendations, which should lead to economies, and those should be reflected in the performance report.


Also before the Committee was a report on field assets control system (document A/57/765), which outlines the progress achieved since the 2001 report on the matter, taking into consideration the comments made by the Advisory Committee and the Board of Auditors.


Designed to overcome the difficulties associated with non-expendable property management, the field assets control system was developed by the Department of Peacekeeping Operations to provide an auditable chain of accountability for United Nations-owned assets from their initial procurement through their final disposal in line with existing financial rules and regulations.  Following the installation of the system in all missions, the ACABQ in its 2001 report pointed out the need to ensure the presence of personnel qualified to use the system in all the services of the missions, so as to avoid disruptions resulting from the frequent rotation of staff.  Subsequently, the Department of Peacekeeping Operations has provided training to 1,170 personnel. 


Among other actions, the report describes the establishment of a help desk within the Communications and Information Technology Service of the Logistics Support Division to provide additional support to users and system administrators in a centralized, cost-effective manner.  In response to the concerns expressed by the Board of Auditors, the administration has also taken steps to address the differences in the closing balances for the period ended 30 June 2001 and opening balances as at 1 July 2001.


To further improve property management and take advantage of technological innovations, the field assets control system is to be phased out by mid-2004 and replaced by an enhanced system, Galileo.  Galileo is a web-based system, which builds on the existing functional design of the field assets control system to minimize retraining costs, while including additional data-management, analysis and reporting tools.


Another Secretary-General’s report before the Committee (document A/57/787) outlines the measures that would better streamline the policy guidelines related to the temporary duty assignment of staff in peacekeeping missions.  The report reviews each category of mission staff eligible to be considered for detail or reassignment to a Peacekeeping Department field mission and outlines the process by which they may apply and be selected.  Additionally, established organizational policy and guidelines on mission assignment/detail are reviewed in the light of relevant administrative instructions and improvements in the Department’s internal mechanisms for addressing vacancy and mobility in field missions.


For example, the Organization’s new staff selection system set forth in Administrative Instruction ST/AI/2002/4 of 23 April 2002 has also provided a new framework for the selection of field personnel by the DPKO.  Since March 2002, vacancy announcements have become the normal means of filling vacant posts in field missions.  In the 12 months to 31 March 2003, the Peacekeeping Department advertised and filled 556 posts in the Professional and Director categories, and 80 posts in the Field Service category.  In March, the Rapid Deployment Roster was launched, aimed at enhancing the Department’s ability to deploy a pre-screened and pre-trained core of experienced field staff to a new mission within 14 days.


The document invites the General Assembly to take note of the achievements to date and planned future activities described in the report against the backdrop of the current global trend towards the reduction of civilian posts in peacekeeping operations, as well as enhanced procedures and technologies for the identification of suitably qualified candidates to staff field missions.


In his report on rates of reimbursement (document A/57/774), the Secretary-General recalls that by its resolution 55/274 of 14 June 2001, the Assembly has requested him to submit a methodology for reimbursement of troop costs, covering troops and formed police units, taking into account the views expressed by Member States.  In addition, the Assembly requested that a questionnaire be submitted to troop-contributing countries on the basis of elements and guidelines contained in the same resolution.


Initially, as of 25 October 1973, standard rates of reimbursement to countries for pay and allowances for their troops serving in the forces were established at $500 per person per month, on the basis of several factors, including the cost of weapons and ammunition, personal clothing, gear and equipment.  Under standard rates, reimbursement is paid to governments, on an equal basis, for their troops serving side by side in peacekeeping forces.  It was recognized that, based on a standard formula, some troop contributors would not receive full reimbursement for the expenses borne by them in providing troops to United Nations peacekeeping forces.  The standard rates of reimbursement were revised by the General Assembly in 1977, 1980, 1991, 2001 and 2002, when the standard monthly rate of reimbursement reached $1,028 per person.


Current consideration of a revised methodology started with compilation of comparable data on troop costs, which culminated in a survey conducted in 1996.  In 2000, the Assembly requested the post-Phase V Working Group on reform procedures for determining reimbursement of contingent-owned equipment to consider the current methodology underlying the calculations of standard rates of reimbursement to troop contributors, including ways to produce timely and more representative data, and to report on the results of its review at the resumed fifty-fifth session of the General Assembly.  The Working Group did not reach agreement on the matter, but it did submit two proposals on the matter.


In his report, the Secretary-General proposes to maintain the existing troop-cost components in the current methodology and to include post-deployment medical costs and peacekeeping-training costs as additional cost components. Criteria for the validity of the survey of troop contributors have also been incorporated in the proposed methodology.  In addition, a proposal is made on the period of review of the rates.  A questionnaire based on the proposed methodology is contained in the annex to the report.


Also before the Committee was the Secretary-General’s note on the Peacekeeping Reserve Fund (document A/57/798), which was established in 1992 as a cash-flow mechanism to ensure the rapid response of the Organization to the needs of peacekeeping operations. The initial level of the Fund was set at $150 million. The report provides information on the status of the Reserve Fund as at 30 June 2002, when it stood at some $197.39 million.  Of that amount, $14.137 million was subsequently transferred to the account of the United Nations Logistics Base (UNLB) at Brindisi, Italy, to meet requirements for the strategic deployment stocks.  An amount of $183.25 million, therefore, remains in the Fund.  The report suggests that the Assembly may wish to apply the amount of $33.25 million above the authorized level to the financing of requirements for the peacekeeping support account for 2003/2004.


Another note by the Secretary-General relates to the write-off of contingent-owned equipment at liquidated missions (document A/57/788).  According to this report, for the period 2001-2002, a total of 1,365 cases were pending processing in that respect.  All of these cases have been processed, and Member States were requested to concur to the proposed reimbursable amounts.  The total amount reimbursable was some $34.82 million, out of which $27.56 million has been paid.  The document provides details regarding the amounts under certification and placed in accounts payable.  The Secretariat requests Member States to concur with the proposed amounts in order to certify these claims by 30 June 2003.


Closed Peacekeeping Missions


The Secretary-General’s report on the updated financial position of closed peacekeeping missions as of 30 June 2002 (document A/57/789) provides information on 10 closed missions.  They include:  the Military Observer Group of the United Nations Verification Mission in Guatemala (MINUGUA); United Nations Mission in Haiti (UNMIH); United Nations Observer Group in Central America (ONUCA) and United Nations Observer Mission in El Salvador (ONUSAL); United Nations Operation in Mozambique (ONUMOZ); United Nations Operation in Somalia (UNOSOM); United Nations Preventive Deployment Force (UNPREDEP); United Nations Protection Force, the United Nations Confidence Restoration Operation in Croatia, the United Nations Preventive Deployment Force and the United Nations Peace Forces headquarters (UNPF); United Nation Support Mission in Haiti (UNSMIH), United Nations Transition Mission in Haiti (UNTMIH) and United Nations Civilian Police Mission in Haiti (MIPONUH); United Nations Transitional Administration for Eastern Slavonia, Baranja and Western Sirmium (UNTAES) and Civilian Police Support Group; and the United Nations Transitional Authority in Cambodia (UNTAC).


The report says that in light of the Organization’s overall situation, and the fact that assessed contributions to peacekeeping operations in the amount of $1.5 billion remain unpaid as of 15 March 2003, the Secretary-General proposes that the return of cash available for credit to Member States be suspended until the financial situation improves regarding the fund balances of the missions.


[In the final performance reports for the United Nations Angola Verification Mission (UNAVEM III), United Nations Mission of Observers in Tajikistan (UNMOT), United Nations Observer Mission in Liberia (UNOMIL), United Nations Assistance Mission for Rwanda (UNAMIR), and the United Nations Mission in the Central African Republic (MINURCA), below, the Secretary-General makes the same recommendation.]


According to the final performance report of the United Nations Angola Verification Mission (UNAVEM) and the United Nations Observer Mission in Angola (MONUA) (document A/57/796), the fund balance of the Missions as of 30 June 2002 amounted to some $115.1 million, comprising $60.43 million in uncollected assessed contributions, as well as net cash of some $54.66 million.  Some $12.46 million is needed to settle outstanding government claims for contingent-owned equipment, goods and services.  The Secretary-General recommends that $12.46 million be retained from the balance of appropriations to meet the cost of outstanding government claims.


The Secretary-General’s report on the financing of the United Nations Mission of Observers in Tajikistan (UNMOT) (document A/57/89) provides details on the final disposition of the Mission’s assets.  As of 31 December 2000, the inventory value of the Mission’s assets amounted to some $9.6 million, 68 per cent of which has been transferred to other peacekeeping operations or to the UNLB at Brindisi, Italy, for temporary storage.  The General Assembly is asked to take note of the report on the final disposition of UNMOT assets.


According to the final performance report for UNMOT (document A/57/792), as of 30 June 2002, the Mission’s fund balance amounts to some $8.9 million.  The Assembly is asked to appropriate an additional amount of $46,000 for liquidation activities from 1 July to 30 September 2000 and to offset that amount against an unspent balance of some $17.13 million. 


According to the final performance report of the United Nations Observer Mission in Liberia (UNOMIL) (document A/57/794), UNOMIL’s final assets as of     30 June 2002 amounts to some $16.5 million, including about $3.6 million in uncollected assessed contributions and available net cash of some $12.9 million. 


Regarding the financing of the United Nations Assistance Mission for Rwanda (UNAMIR) (document A/57/753), the Secretary-General notes that the inventory value of the Mission’s assets as of December 1996 amounted to some $64.5 million.  The Assembly is asked to approve the donation of assets with a total inventory value of $12.6 million and the corresponding residual value of $2.4 million to the Government of Rwanda.  It is also asked to approve the donation of assets with a total inventory value of $79,200 and corresponding residual value of $53,400 to the Medical Unit of a Member State.


In the final performance report of the United Nations Observer Mission in Uganda-Rwanda (UNOMUR) and the United Nations Assistance Mission for Rwanda (UNAMIR) (document A/57/791), the Secretary-General notes that total assets for the Mission amounted to some $45.01 million.


On the financing of the United Nations Mission in the Central African Republic (MINURCA) (document A/57/631), the Secretary-General states that the inventory value of the Mission’s assets as of 30 April 2000 amounted to some  $12.5 million, 52.5 per cent of which has been transferred to other peacekeeping operations or the UNLB at Brindisi, Italy, for temporary storage.  The remaining 47.5 per cent relates to assets that have been disposed of in the Mission area, reported as written off or lost.  The Assembly is asked to take note of the final disposition of MINURCA’s assets.


In the final performance report for MINURCA (document A/57/795), the Secretary-General recommends that the provisions of several financial regulations be suspended regarding the liabilities and fund balance of some $36.25 million in light of the Mission’s cash shortage.


INSTRAW


Also before the Fifth Committee was a note by the Secretary-General (document A/56/907) transmitting a report of the Office of Internal Oversight Services (OIOS) on the audit of the United Nations International Research and Training Institute for the Advancement of Women (INSTRAW).  In a 1998 audit, the OIOS observed that the delay in deciding on a proposed merger of INSTRAW and the United Nations Development Fund for Women (UNIFEM) since 1993 had adversely affected the Institute's funding and performance.  It also observed a lack of effective inter-agency coordination on issues related to women.  The Oversight Office recommended that the Department of Economic and Social Affairs advocate that a decision on institutional arrangements be taken without further delay to address governance problems.  Subsequently, the Under-Secretary-General for Economic and Social Affairs outlined three options to the Steering Committee on Reform and management:  status quo, merger with the Department, or merger with the United Nations University.


The report notes that in its resolution 56/125 of December 2001, the General Assembly decided to establish a working group composed of representatives of Member States to make recommendations to the Assembly, for its consideration by the end of 2002, on the future operation of the Institute.

In its 2001 audit, covering the period from 1998 to August 2001, the OIOS found that the difficulties experienced by INSTRAW noted in the 1998 audit report had been further aggravated and were contributing to the Institute's demise.  Among its main findings, the audit noted that the rationale for making INSTRAW autonomous was not clearly enunciated in its statute.  The INSTRAW Board of Trustees had not assisted the Institute's fund-raising activities and did not fulfil its management oversight and advisory functions.  The goal of financing INSTRAW entirely through voluntary funding had not been achieved, resulting in financial instability.  Also, some important donors interviewed by the Oversight Office expressed concern that INSTRAW had not developed its own "niche" in the research and training areas.


The audit also found that the Gender Awareness and Information Networking System (GAINS), conceptualized as an integrated knowledge and information management system, was to be financed as a project separately from the Institute’s core funding.   However, due to the lack of resources, GAINS had been funded from the INSTRAW budget, resulting in the deferral of other INSTRAW activities.   According to the Oversight Office, the direction and cost-effectiveness of GAINS needed to be evaluated.  The OIOS also identified a number of problems regarding the management and performance of INSTRAW consultants.


The roles and responsibilities of the Department of Economic and Social Affairs had not been clarified with regard to providing direction to the INSTRAW Board and staff or in liasing with the Economic and Social Council and the General Assembly.  The responsibilities of the Special Representatives of the Secretary-General with regard to INSTRAW had not been clearly defined.  In light of the issues discussed in its report, the OIOS questions whether the Institute is capable being viable and self-sustaining in the long term.


The report contains a number of recommendations for the Secretary-General.  The Oversight Office recommends that the Secretary-General detail the role and responsibilities of his Special Representative for INSTRAW, with a clear delegation of authority and instruct the Special Representative to propose to the Working Group that it consider the option of closing INSTRAW as an alternative to sustaining it.


In the event that the Working Group decides not to consider this option, the OIOS recommends that the Secretary-General instruct his Special Representative for INSTRAW to propose to the Working Group that it examine the feasibility of the Institute’s continuation as an autonomous body within the framework on the United Nations and the strategy for achieving effective autonomy for INSTRAW through the appropriate delegation of authority.  The Secretary-General should instruct his Special Representative to propose to the Working Group that it consider improvements to the INSTRAW Board of Trustees and propose to the General Assembly that it consider the need to continue the temporary funding of the Institute’s core operations from the United Nations regular budget until the Working Group has completed its in-depth assessment of INSTRAW and made its final recommendations concerning its sustainability.


The Oversight Office also recommended that the Interim Director of INSTRAW ensure that the GAINS project is evaluated and refocused before proceeding with further implementation; consider specific donor interests and intergovernmental mandates as primary criteria in developing a more focused plan of action and formulate a business plan for its programme of work.


According to the Secretary-General’s report on INSTRAW’s financial situation (document A/57/797), the Assembly, by its decision 57/580, requested the Secretary-General to report to it before the end of its resumed fifty-seventh session on the Institute’s financial situation, including the status of voluntary contributions, to meet the resource requirements needed to ensure its viability and to consider an additional charge against the contingency fund, as an additional provision to the Institute for core activities in 2003.


It is anticipated, the report says, that resources available to the INSTRAW Trust Fund will allow the Institute’s operations to continue at a minimal level until the end of November 2003.  To sustain the Institute’s operations through 31 December 2003, an additional $100,000 would be required.  The Secretary-General proposes that he further report to the Assembly on INSTRAW’s financial situation at its fifty-eight session.


Introduction of Reports


Introducing the Secretary-General’s report on the United Nations Organization Mission in the Democratic Republic of the Congo (MONUC), JEAN-PIERRE HALBWACHS, United Nations Controller, said it was a difficult, complex mission that was constantly evolving.  Three developments had taken place since the peacekeeping budgets had been prepared and MONUC was one of them.  MONUC’s mandate had expanded.  Further changes in the mandate were likely and would require the submission of a new budget in the fall during the main part of the fifty-eighth session.  In the meantime, an approved budget needed some flexibility -- given what was happening in the country -- for the establishment of additional posts to meet the urgent and immediate requirements in connection with the Mission’s reorganization.


Turning to the progress report on the status of the airfield services contract, he said the report provided details on the bidding process for a new airfield services contract.  A comprehensive reassessment of all requirements related to the provision of airfield services in support of MONUC had been undertaken.  Requests for proposals, dated 9 September 2002, had been issued to  46 firms.  Four proposals, including an alternate proposal, had been received.  A joint team, consisting of representatives from MONUC and the Logistics Support Division, undertook the evaluation of the technical and management proposals.  The case had been presented to the Headquarters Committee on Contracts on 19 December 2002.  Final contract negotiations with the recommended vendor had been undertaken and a contract concluded.  During the rebidding process, the Office of Internal Oversight Services was kept apprised of developments.


Introducing the report on the United Nations Mission in Sierra Leone (UNAMSIL), he said a budget implementation rate of some 89 per cent was due to several reasons, including savings in rotation of military personnel.  Several troop-contributing countries rotated their contingents once annually rather than adhering to the established policy of two rotations of contingent units per annum.  Other reasons included delays in recruitment of international civilian staff and United Nations Volunteers; reduced requirements for prefabricated facilities; minimal acquisition of additional vehicles and better management of existing fleet and lower air transportation costs due to lower than projected utilization of flight hours.


He said UNAMSIL’s budget reflected a downsizing of the Mission in accordance with Security Council resolution 1436 of 2002.  As mentioned in his overall introduction, since the preparation of that budget, the Council had authorized a further reduction of troops from 13,500 to 11,500, resulting in a reduction of some $34 million to the budget proposed.  While a revised budget was not being submitted, the amount had been conveyed to the Advisory Committee when it reviewed UNAMSIL’s budget for the Committee’s consideration.


Introducing related reports of the ACABQ, the Chairman of the Advisory Committee, CONRAD S.M. MSELLE, said that the estimates for UNAMSIL had been prepared on the basis of troop strength of 12,740, before the Secretary-General had submitted a report to the Security Council indicating further reduction to 11,500 by November 2003.  The Committee recommended an appropriation of $520.05 million, but due to the potential for further reduction, the amount to be assessed should not exceed $486 million gross.  The amount of $34 million was indicated in paragraph 14 of the ACABQ report.


Regarding MONUC, he said the Advisory Committee continued to experience many difficulties in examining budget estimates for the Mission, and its report contained in document A/57/772/Add.10 was provisional pending the submission of a new budget before the end of 2003.  An appropriation of $582 million was recommended.  All posts, including those proposed in the current documentation, should be justified.  The new budget staffing table for the Mission, both for civilian and military personnel, should be reviewed and justified, taking into account the observations of the Advisory Committee.  The caution expressed by the ACABQ in previous reports regarding the flexibility granted to the Secretary-General to manage the staffing tables for peacekeeping operations should also be considered.


Mr. HALBWACHS then introduced the Secretary-General’s report on the review of the rates of reimbursement to the governments of troop-contributing States.  Since the establishment of standard rates of reimbursement effective October 1973, the rates had been subsequently revised on the basis of reviews submitted to the General Assembly.  The latest revision took effect on 1 January 2002.  In light of the fact that the post-Phase V Working Group had not reached a consensus in its consideration of the methodology on troop costs, the General Assembly, in its resolution 55/274 of June 2001, had requested the Secretary-General to submit a methodology for the reimbursement of troop costs, covering troops and formed police units, as well as a questionnaire to be submitted to troop contributors.  The forthcoming report took into account the views expressed by Member States in the two proposals submitted by the post-Phase V Working Group.


The proposed methodology was predicated on the several considerations, he said.  They included:  direct costs incurred by troop contributors, simplicity of the data collection and analysis, and efficiency in the reimbursement process.  The Secretary-General had proposed that the troop-cost components covered under the current methodology be maintained, with the addition of post-deployment medical costs and peacekeeping-related training costs.  In addition, the coverage of the survey under the current methodology would also be maintained, with specific guidelines set out in the questionnaire for the number of military personnel on which the response was to be based.  With the development of the proposed manual on the Standardization and Evaluation of United Nations Peacekeeping Training, he proposed that direct costs incurred by troop contributors for pre-deployment peacekeeping training be included in the methodology.


As an alternative to the proposal in the post-Phase V Working Group to exclude the highest and lowest 25 per cent of the responses from the survey, the Secretary-General had proposed that only the highest and lowest 5 per cent of the valid responses be excluded to ensure a more representative sample of the total number of troop contributors surveyed.  On the periodicity of the review, and taking into account the random pattern in the revision of the rates of reimbursement, a five-year cycle did not appear unreasonable should the Assembly decide that such revisions take place at regular intervals.


On the Peacekeeping Reserve Fund, he said the Fund had been established in 1992 to serve as a cash-flow mechanism to ensure the rapid deployment of peacekeeping operations.  The initial level of the reserve fund had been set at $150 million.  In its resolution 49/233 A, the Assembly had decided to limit the use of the Fund to the start-up phase of new peacekeeping operations, to the expansion of existing ones or to unforeseen and extraordinary expenditures related to peacekeeping.  An amount of $183.25 million remained in the Fund as at 30 June 2002 -- $33.25 million above the authorized level.  The report suggested that the amount of $33.25 million be applied to financing requirements for the support account for peacekeeping operations for the period from 1 July 2003 to 30 June 2004.


The report on the write-off of contingent-owned equipment at liquidated missions summarized the status of the processing and settlement of contingent-owned equipment written-off at liquidated missions, he said.  All cases had been processed, and Member States were requested to concur with the proposed reimbursable amounts.  The total amount reimbursable was $34.8 million, out of which $27.56 million had been paid; an amount of $2.34 million was under certification or placed in accounts payable.


Introducing the Secretary-General’s reports on closed peacekeeping missions, he said cash from closed mission was the only source that could be used for temporary cross-borrowing when the regular budget, the Tribunals or active peacekeeping missions ran out of cash.  Borrowing from active peacekeeping missions was not permitted under legislation.  The use of the Peacekeeping Reserve Fund was restricted to start up costs for new missions or for expansion of active missions.  Cash available in closed mission amounts beginning January 2003 amounted to $380 million.  Available cash reported in the various performance reports currently submitted to the General Assembly amounted to some $168.9 million.


If the $168.9 million were to be returned to Member States, that would leave $170 million in cash for temporary cross-borrowing when the regular budget, the Tribunals or active peacekeeping missions ran out of cash.  That amount represented less that half a month of average disbursement for the regular budget, Tribunals and peacekeeping missions combined.  It was not prudent to operate with that level of available cash to meet potential shortfalls.  Another factor that would affect cash flow during the next peacekeeping financial period was that the scale of assessment for 2004 would not be set by the General Assembly before December.  Consequently, peacekeeping assessments for the 2004 portion would not take place before January.


Mr. MSELLE then said that, previously, he had referred to 15 reports that the Advisory Committee had not considered before adjourning its session in March.  Three of 15 reports would not be submitted to the current resumed session (documents A/57/765, A/57/774 and A/57/798).  He then reported orally on the other 12 reports.


The Advisory Committee agreed with the proposal of the Secretary-General (document A/57/798) that $33.25 million in the Peacekeeping Reserve Fund should be used to finance the support account for the financial period of 2003/2004, he said.  That action would restore the Reserve Fund to the approved level of

$150 million, to be used for start-up phase of new peacekeeping operations, expansion of existing missions, and unforeseen and extraordinary expenditures related to peacekeeping. The comments of the ACABQ on the write-off in contingent-owned equipment in liquidated missions were in its general report.  The report in document A/57/788 provided the latest information on amounts awaiting concurrence from Member States and amounts under certification or in accounts payable.


On the disposition of assets, he said the ACABQ recommended that the General Assembly take note of the reports before the Fifth Committee on MINURCA (document A/57/631) and UNMOT (document A/57/89).  The ACABQ also recommended that the Assembly take note of the disposition of assets, as proposed by the Secretary-General in his report A/57/753 on UNAMIR and also approved the donation of assets as proposed in the same document.


In several reports on the performance of closed missions, the Secretary-General recommended suspending relevant financial regulations to retain cash that would otherwise be credited to Member States immediately, he said.  A similar request was also made in the report on improving the financial situation of the United Nations.  While previously he had stated that suspension of financial regulations would lead to the retention of $142.4 million, the Advisory Committee had been subsequently informed that the amount had been revised to $168.9 million.  Taking into account the nature of the request, its timing and the large amount of cash involved, the Advisory Committee believed that before a decision was taken, more information and clarification should be provided to the Fifth Committee in the context of its consideration of the financial situation of the Organization and the performance reports on closed missions.


DIMITRIOS ZEVELAKIS (Greece), on behalf of the European Union and associated States, addressing the report of the Secretary-General on the review of the rates of reimbursement to troop-contributing countries, said the methodology was a technical issue on which expert advice was required.  The Union had fully supported, as the largest collective contributor, the expansion of peacekeeping in terms of Headquarters activity and of new missions, particularly in Africa.  Troop-contributing countries played an important role in peacekeeping and must have fair reimbursement, mindful of the need to reconcile a standard rate with the “no-profit” stipulation set out in 1974.


The report fell significantly short of the General Assembly’s request contained in its resolution 55/274, he said.  The need for transparency, financial control, confirmed delivery of services and other factors -– all specifically mentioned in the resolution -– had not been fully addressed.  A convincing case had yet to be made on the merits of including isolated new variables into the methodology.  He was unclear as to why an overall review involving experts, as suggested by the ACABQ in 2001, had not taken place.  Any decision on the methodology could only be taken on the basis of comprehensive information about its financial implications.


DILEEP NAIR, Under-Secretary-General for Internal Oversight Services, then introduced the report of the OIOS on the audit of INSTRAW (document A/56/907).  He said that the document addressed the sustainability of the Institute, which had been the focus of several audits, evaluations and internal reports to the Department of Economic and Social Affairs.  The Oversight Office report had identified a number of continuing problems and concluded, among other things, that the difficulties experienced by INSTRAW were contributing to the Institute’s gradual decline.  The INSTRAW had generally not achieved such primary objectives as exercising independence in research, raising and utilizing funds, and recruiting staff.  The goal of financing INSTAW entirely through voluntary funding had not been accomplished.


He also described the main OIOS recommendations and reported that all of them had been accepted by the Secretary-General who had then forwarded them to the Working Group and the interim Director of INSTRAW for further consideration.  The Secretary-General had also agreed that the role of the Special Representative for INSTRAW needed to be clarified.  The Working Group had since accepted the recommendations relating to examining the feasibility of INSTRAW’s autonomous status, the reconstitution of its Board of Trustees and the need to continue temporary funding from the Organization’s regular budget.  The Group did not agree with the recommendation to consider the option of closing the Institute.  He also noted that, as reported by the Secretary-General in his April report (document A/57/797), the Institute’s financial status remained precarious since the resources available in the Trust Fund were sufficient to support continued operations only through November 2003.


Introducing a related ACABQ report, Mr. MSELLE said that $481,900 was available and was sufficient to maintain the Institute’s operations, including the payment of salaries of eight staff members until the end of November. Accordingly, the ACABQ recommended that the Assembly take note of the report of the Secretary-General and request him to report further on the financial situation of the Instituted to the fifth-eighth session of the Assembly.


Organizational Matters


As the Committee turned to organizational matters, several delegations expressed concern about the oral introduction of ACABQ reports, emphasizing the need for written reports to determine their positions on major issues.


Responding, the ACABQ Chairman, Mr. MSELLE, said that since 1946 it had been the Advisory Committee’s practice to issue oral reports, publishing them later as official documents of the General Assembly.


The Fifth Committee Chairman, MURARI RAJ SHARMA (Nepal), said oral reports were in keeping with the Fifth Committee’s tradition.


Participating in the discussion were the representatives of Morocco (on behalf of the “Group of 77” developing countries and China), Greece (on behalf of the European Union), Dominican Republic, and Venezuela.


Following a brief suspension of the meeting, the representative of Morocco (on behalf of the Group of 77 and China) insisted that the reports be presented in writing before further considering them.


The representative of Greece (on behalf of the European Union) said he hoped that would not set a precedent for the Committee’s future work.


In closing, the CHAIRMAN urged the Committee to use its remaining time in the most efficient manner possible so as to conclude the second resumed session as scheduled.


The representative of Greece (on behalf of the European Union) reiterated the Group’s full support for the Bureau’s construction of the work programme for the remainder of the session.  He was hopeful that the Committee would be in a position to conclude on time.


* *** *