9 October 2013
General Assembly
GA/AB/4074

Department of Public Information • News and Media Division • New York

Sixty-eighth General Assembly

Fifth Committee

5th Meeting (AM)


United Nations Financial Indicators ‘Generally Positive’, Top

 

Management Official Tells Budget Committee

 


Under-Secretary-General Says Regular Budget

‘Under Pressure’ with $945 million in Assessments Outstanding


While labelling the Organization’s overall financial condition “generally positive”, the United Nations senior management official told the Fifth Committee (Administrative and Budgetary) today that the regular budget’s cash position this year was under pressure with $945 million of its $2.61 billion regular budget still outstanding.


Yukio Takasu, Under-Secretary-General for Management, laid out four main financial indicators — assessments levied on Member States, unpaid assessments, available cash resources and the Organization’s debt to Member States — to give the General Assembly’s budgetary Committee a snapshot of the Organization’s financial picture.  [The Secretariat will incorporate this information into a report, which will be released for the Committee’s discussion at its 17 October meeting.]


In other business, Rashid Bayat Mokhtari, Chair of the fifty-third session of the Committee for Programme and Coordination, introduced this body’s annual report, issued in July.  It detailed the results of the Programme Coordination Committee’s sessions held earlier this year.  In line with its responsibility to review the Secretary-General’s work programme, that body examined the changes laid out in the proposed programme budget for the biennium 2014-2015, along with several evaluation reports, and it made recommendations relating to the proposed programme budget for the 2014-2015 budget cycle.


Turning back to the Secretariat’s semi-annual snapshot of the Organization’s finances, Mr. Takasu’s presentation included details on the regular budget, United Nations peacekeeping operations, the tribunals and the Capital Master Plan account.  The account was created to manage the ongoing renovations of the world body’s master plan.


While cash balances were expected to be positive for peacekeeping operations, the international tribunals and the Capital Master Plan, the regular budget reserves would not be able to cover the Organization’s projected expenditures of $620 million through year-end, Mr. Takasu said.  As of 1 October 2013, available cash in the regular budget totalled $55 million.  Even with $150 million lying in a Working Capital Fund and $259 million in a Special Account, the combined $464 million earmarked for regular budget needs would produce a shortfall if outstanding assessments were not paid.


The Organization’s year-end financial position perennially hung in the balance as the Secretariat waited for the pending deposits of Member States.  This fall, unpaid assessed contributions tallied $945 million as of 1 October 2013. That was $90 million more than the $855 million outstanding on 5 October 2012, last year’s cut-off date for the collection of Secretariat data used in its October 2012 presentation.


According to a chart presented at today’s session, the United States was responsible for the bulk — $795 million — of the unpaid regular budget assessments.  Brazil followed with a $75 million figure and Venezuela filled the third slot with an unpaid bill of $22 million.  Fifty-six other Member States owed the Organization $53 million for the regular budget.


By 1 October 2013, 134 Member States had paid their regular budget assessments in full, five more than met the 2012 cut-off date.  Mr. Takasu said the Secretariat was very grateful to these 134 Member States.


Secretariat finance officials had warned the Committee in May that the year-end cash situation would be extremely tight as the Secretariat was given only a portion of its recosting total for 2012.  The remaining portion was deferred until the end of this year.  He said the Assembly had authorized the use of the Working Capital Fund as a financing mechanism to cover repair costs stemming from the hurricane that struck the Northeast on 29 October 2012, pending the receipt of insurance settlements.  He added that it had not been necessary to use the fund for these purposes.


As always, the shifting demands of the Organization’s peacekeeping activities – which run on a 1 July to 30 June fiscal year – had made predicting the financial outcome for peacekeeping operations more difficult, he said.  In addition, assessment letters were sent out separately for each mission and issued for different periods throughout the fiscal year as they could only be issued through the individual mandate period approved by the Security Council.  “All of these factors complicate a comparison between peacekeeping operations and the regular budget,” he added.


Using the same 1 October 2013 cut-off date, outstanding contributions for peacekeeping operations tallied $3.4 billion, up $2.1 billion from the $1.33 billion outstanding as of 31 December 2012.  Mr. Takasu said the current level of assessments resulted from the significant level of assessment bills sent out this year after the Fifth Committee revised its methodology on the scale of assessments.  Assessments for the January to June 2013 period were issued in January 2013.  Assessments for the 2013/2014 fiscal period followed six months later in July 2013.


For example, one of the charts in today’s presentation showed that the $3.4 billion in unpaid peacekeeping assessments included two assessments issued just last month.  There was a $426 million bill levied on the United Nations Interim Force in Lebanon (UNIFIL) on 16 September and a $371 million bill levied on the United Nations Mission in Liberia (UNMIL) on 20 September.


“Due to the unpredictable amount and timing of peacekeeping assessments throughout the year, we understand that it can be more difficult for Member States to keep fully current with assessments,” Mr. Takasu said.  Therefore, he expressed special gratitude to the 33 Member States that were fully current with their peacekeeping assessments.


He also acknowledged the differences in the fiscal years of Member States, which could affect their ability to make timely payments to the Organization.  While the overall level of unpaid peacekeeping assessments had increased considerably in 2013, this resulted mostly from the increase in assessments in 2013, as a portion of the 2012-2013 fiscal year assessment.


It was a positive sign that the level of unpaid assessments, as of the first of this month, made up 35 per cent of the total peacekeeping assessments for 2013, a smaller share than the 40 per cent level of a year ago.


Turning to the Organization’s outstanding payments to Member States, Mr. Takasu said the Secretariat had been working arduously to minimize the level of these outstanding payments, which totalled $525 million at the end of 2012.  The monies owed to Member States were expected to be reduced to $425 million by year’s end.  For example, a chart used during the presentation indicated that the Organization planned to send out $159 million in payments for troops on 10 October.


As of 1 October this year, the Organization owed Member States $267 million for troops and formed police units; $442 million for contingent-owned equipment claims by active missions, and $86 million for contingent-owned equipment claims by closed missions.  This total of $795 million did not include $66 million for letters of assist and $1 million for death and disability claim costs.


Regarding the financial situation of the two international tribunals and the International Residual Mechanism, Mr. Takasu said their unpaid assessments were $60 million on 1 October 2013, $3 million less than their level on 5 October 2012.  Ninety-six Member States had paid their assessed contributions in full for the three entities by 1 October, one more than last year.  Again, the United States topped the list of Member States with unpaid assessments, owing $32 million of the $60 million.


Finally, Mr. Takasu outlined the financial position of the Capital Master Plan account.  Most of the $1.87 billion assessed under this special account had been received, with $1.6 million outstanding.  While the cash balances had remained solid so far, the account would veer into shaky financial territory by the end of April 2014 when its cash was exhausted.  Member States must then make a decision on Capital Master Plan financing and associated costs.


As of 1 October 2013, 166 Member States had paid their Capital Master Plan assessments in full.  Mr. Takasu paid particular tribute to the 33 Member States that had fully paid all assessments due and payable as of 9 October 2013.


Regarding the programme planning agenda item, the representatives of Fiji (on behalf of the “Group of 77” developing countries and China), Japan, United States and Cuba spoke.


The Committee will reconvene at 10 a.m. on Friday, 11 October, to discuss Financial Reports and the reports of the Board of Auditors, and the Proposed Programme budget: biennium 2014-2015 as it related to the International Public Sector Accounting Standards.

Background


The Fifth Committee met this morning to hear the semi-annual presentation of the Secretariat statement on the financial situation of the United Nations and to consider its agenda item on programme planning.  Under the latter, it had before it the report of the Committee for Programme and Coordination’s fifty-third session (3-28 June 2013) (document A/68/16).


Programme Planning


RASHID BAYAT MOKHTARI, Chair of the Committee for Programme and Coordination, introduced the report of that body’s fifty-third session (document A/68/16).  In line with its responsibility to review the Secretary-General’s work programme, the Programme and Coordination Committee examined proposed changes to the biennial programme plan as reflected in the proposed programme budget for the biennium 2014-2015, along with several evaluation reports.  The Programme and Coordination Committee made recommendations relating to the proposed programme budget for 2014-2015 concerning Disarmament; Trade and Development; Environment; Human Settlements; Economic and social development in Africa; and Economic and social development in Asia and the Pacific. 


Regarding evaluation, he said the Programme and Coordination Committee had examined reports by the Office of Internal Oversight Services {OIOS) on strengthening the role of evaluation in programme design, delivery and policy, and on the United Nations Environment Programme, the Office for the Coordination of Humanitarian Affairs, and the United Nations Office on Drugs and Crime.  It had also responded to the absence of the programme evaluation report on the Office of the United Nations High Commissioner for Refugees (UNHCR). 


Having reviewed the annual overview report of the United Nations System Chief Executives Board for Coordination (CEB), he stressed the importance of the role of the CEB in ensuring coordinated system-wide support of the post-2015 development agenda.  The Programme and Coordination Committee had also recommended that the General Assembly ask the Secretary-General — as Chair of the CEB — to report on ways and means of strengthening the Board’s role in order to ensure coordinated and effective action on programmatic, management and operational issues linked to the new agenda.


He pointed to the Programme and Coordination Committee’s recommendation that the Assembly reiterate its request for the United Nations system to continue promoting greater coherence in its work supporting the New Partnership for Africa’s Development (NEPAD), and to continue mainstreaming Africa’s special needs in all United Nations normative and operational activities.  To strengthen implementation of the African Union/NEPAD African Action Plan 2010-2015, he underlined the need for continued close coordination with the NEPAD Planning and Coordinating Agency, along with other structures.  Future Secretary-General reports should contain detailed information relating to efforts to achieve NEPAD targets, with the aim of enhancing the focus on the quantitative and qualitative impact of United Nations activities in support of NEPAD.


Expressing satisfaction that reports of the Joint Inspection Unit would be considered again, after a period of absence, he stated that the Programme and Coordination Committee had examined and made recommendations on the Unit’s reports on Strategic planning and Financing for humanitarian operations in the United Nations system.


PETER THOMSON (Fiji), speaking on behalf of the “Group of 77” developing countries and China, said programme planning dealt with “the crucial task of translating the intergovernmental mandate into implementable programmes”, so the Programme and Coordination Committee’s role was vital.  It guided the Secretariat by interpreting legislative intent and worked to improve programme design, performing essential oversight.  Endorsing the conclusions and recommendations in the body’s report, he welcomed the guidance the Programme and Coordination Committee had given on changes to the biennial programme plan, especially those relating to the United Nations Conference on Sustainable Development.  Underlining the need for adherence to resolution 58/269, he said priority-setting in the United Nations was “the sole prerogative of the Member States”, adding that programme narratives of programme budget fascicles should be identical to the biennial programme plan.


Stressing the importance of strengthening the United Nations evaluation culture, he welcomed the Programme and Coordination Committee’s consideration of the OIOS report on that subject as it related to programme design, delivery and policy, believing it would contribute to improvement in delivery of intergovernmental mandates.  Nonetheless, the lack of cooperation of the UNHCR concerned him.  Coordination within the United Nations system was also important and the CEB was important to improving that.  As Chair of the Board, the Secretary-General should take further action to enhance its transparency and accountability to Member States.  He also encouraged greater cooperation between the Board and the International Civil Service Commission and the Joint Inspection Unit, and said the United Nations should continue to support NEPAD.


HIROSHI ONUMA ( Japan) recognized the significant role played by the Programme and Coordination Committee in setting the United Nations regular budget, and highlighted the fruitful discussions that took place during its fifty-third session.  He would continue participating in its deliberations and called for its strengthening in order to facilitate the regular budget process.  He noted that the Programme and Coordination Committee’s 2012 and 2013 schedules had clashed in both years with that of the second resumed session of the Fifth Committee, obliging the Secretariat and Member States to address those meetings simultaneously, affecting progress in both arenas.  To avoid or minimize potential overlap, realistic dates for the meeting of both bodies would be essential going forward, especially seeing as each programme included in the proposed strategic framework for the period 2016-2017 were to be discussed during the Programme and Coordination Committee’s upcoming fifty-fourth session.


STEPHEN LIEBERMAN ( United States) said he hoped to enhance the role of the Programme and Coordination Committee in improving United Nations effectiveness and strategic focus and in holding the Secretariat accountable for results the Organization achieved with the resources Member States provided.  Its role was of great importance in shaping the strategic framework and improving strategic planning processes.  One particular shortcoming in budget and planning processes that needed addressing was the lack of effective implementation of results-based management.  A reformed and strengthened Programme and Coordination Committee could play a critical role in transforming the current results-based management process.  As the Organization’s expert body, it could challenge the internal logic of “the so-called logical frameworks” and could ensure that the goals outlined in programme fascicles were specific, measureable, attainable, relevant and time-bound.


By assessing technical weaknesses in the current processes, the Programme and Coordination Committee’s recommendations would allow Member Sates to better hold the Secretariat accountable, he said.  The Programme and Coordination Committee also had a mandate to identify obsolete or marginally useful programmes and programme elements, applying its “panoramic view” of the entire strategic framework to boosting efficiency and eliminating overlap and duplication.  Doing so would not only cut costs at a time of budgetary constraints, but would allow better service delivery to those most in need.


Ms. MORENO GUERRA ( Cuba), aligning with the “Group of 77” and China, said the Programme and Coordination Committee’s relevance was unquestionable.  The Programme and Coordination Committee had considered changes to the programme budget for 2014-2015 based on resolution 58/269.  That resolution also stressed the intergovernmental nature of the Programme and Coordination Committee, yet concepts such as “weak societies” and the “green economy” had been included despite not having the approval of Member States.  That concerned her, she said, calling for clarification of such terms and stating that such inclusion was a “sustained practice of the Secretariat” running counter to the Charter.  The Secretariat’s recommendations also called for changes to the biennial programme plan, including on Programme 11 on the Environment.  Again, legislative mandates were lacking and some “clearly political” elements were included.  Delegates had expressed dissatisfaction over some proposed changes to the programme budget because they ran counter to resolution 58/269.  That was unacceptable and the Secretariat needed to be more accountable to Member States.  In addition, the Programme and Coordination Committee had been unable to amend the rules of procedure for the Office of Programme Planning, Budget and Accounts because of inconsistencies in documentation on revisions, and because some such documents were inconsistent with decisions of the Assembly.


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