FIFTH COMMITTEE CONTINUES EXAMINATION OF BOARD OF AUDITORS REPORTS

17 October 2002
GA/AB/3523

FIFTH COMMITTEE CONTINUES EXAMINATION OF BOARD OF AUDITORS REPORTS

17/10/2002
Press ReleaseGA/AB/3523

Fifty-seventh General Assembly

Fifth Committee

10th Meeting (AM)

FIFTH COMMITTEE CONTINUES EXAMINATION OF BOARD OF AUDITORS REPORTS

United States, Norway Underline Need

For Timely Publication of Reports, Full Implementation of Board’s Recommendations

Implementation of the auditors’ recommendations and the need to review trust funds whose goal had been attained were among the main issues discussed in the Fifth Committee this morning as it continued its consideration of the reports of the Board of Auditors.

While emphasizing the great importance of oversight functions performed by the Board of Auditors, the representatives of the United States and Norway stressed the need to ensure timely publication of the Board’s reports.  Welcoming the progress in the implementation of the Board’s previous recommendations, they insisted that all of them should be fully implemented.

The representative of Norway said that elaboration of criteria to evaluate the implementation of recommendations would be a useful tool for managers when reporting on measures taken to enhance performance.  Welcoming general improvements in implementation, she wanted to know what had happened in those instances where the recommendations had not been complied with.

While pleased that none of the Board of Auditor’s opinions were qualified, Norway had taken due note of the fact that the Board had emphasized specific concerns by modifying its audit opinions on five organizations out of 16.  Of particular concern was the lack of provisions for end-of-service benefits in some bodies of the United Nations system, as well as the lack of operational/financial reserves and overexpenditure in spite of diminishing income.  It was also important to review those trust funds whose purpose had long been attained, and to introduce a system to rectify overexpenditure there.

Equally important were the recommendations on management issues, and the proposed system-wide review to coordinate information and communications technology efforts to ensure their cost-effectiveness.  Regarding the United Nations High Commissioner for Refugees (UNHCR), she said that an annual audit cycle contributed to better financial management, transparency and efficiency there.  The UNHCR should complete full implementation of all recommendations.

The United Nations Relief and Works Agency for Palestine Refugees (UNRWA) was carrying out a programme of considerable magnitude under challenging conditions, the representative of Norway continued, and she was pleased that out of nine recommendations, five had been fully implemented, with three were in the

course of implementation.  She trusted that the Agency would follow up on the main recommendations of the Board, which concerned, in particular, inappropriate disclosure of construction work costs and a need to recover outstanding tax reimbursement of $26.8 million.  She also noted that the Agency had ended the 2000-2001 biennium with an excess of income over expenditure of $7.4 million for its regular budget activities.  A significant improvement compared with the 1998-1999 biennium was partly attributable to cost containment and strict financial management to match expenditure to income.

The representative of the United States noted the apparent reluctance to critically examine the utility of trust funds that appeared lapsed.  Although the Board had previously recommended that the Office of Programme Planning, Budget and Accounts should review trust funds whose purposes had been attained, and close those that were no longer required, 61 trust funds remained open with no expenditures in this biennium.  There was also a lack of disclosure of relevant information and blatant inconsistencies in accounting policy.  Certain offices were reported not to have essential documents on file, for example, and other bodies reportedly did not properly track funds reviewed and paid during the implementation of projects.

Another concern for his delegation was the few apparent guidelines on the use of consultants, while those that existed were inconsistently applied.  Duties and responsibilities must be determined and specified in a contract before the contractor commenced work.  His delegation had, for example, noted references to consultant payments made without evaluation of their work.  Such carelessness often led to sub-standard work and waste of Member States’ funds.  That could not be accepted as business as usual.

His delegation continued to condemn fee-splitting and believed that the International Criminal Tribunals should have on-site auditors and investigators in place.  Another area of particular concern was the financial viability of the United Nations Office for Project Services, which would not be able to continue to fund in full any deficit from its operations reserve, especially since it was currently budgeting at break-even level in 2002.  The United States delegation agreed with the Advisory Committee on Administrative and Budgetary Questions (ACABQ) report that if Member States wanted that office to continue as a separate and identifiable entity, steps would have to be taken to ensure its viability and success.

The Fifth Committee will continue its consideration of the reports of the Board of Auditors at 10 a.m. tomorrow, 18 October.

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For information media. Not an official record.