BUDGET COMMITTEE RECOMMENDS LIFTING OF SPENDING CAP FOR 2006-2007 BIENNIUM; ALSO CONSIDERS PROCUREMENT REFORM, GENEVA OFFICE REQUIREMENTS

28 June 2006
GA/AB/3748

BUDGET COMMITTEE RECOMMENDS LIFTING OF SPENDING CAP FOR 2006-2007 BIENNIUM; ALSO CONSIDERS PROCUREMENT REFORM, GENEVA OFFICE REQUIREMENTS

28 June 2006
General Assembly
GA/AB/3748
Department of Public Information • News and Media Division • New York

BUDGET COMMITTEE RECOMMENDS LIFTING OF SPENDING CAP FOR 2006-2007 BIENNIUM;


ALSO CONSIDERS PROCUREMENT REFORM, GENEVA OFFICE REQUIREMENTS

 


Australia, Japan, United States Disassociate Selves from Budget Cap Consensus


The Fifth Committee (Administrative and Budgetary) this afternoon recommended that the General Assembly lift the “spending cap” of $950 million, authorizing expenditure of the remaining funds appropriated in the budget for the biennium 2006-2007, with Australia, Japan and the United States disassociating themselves from that decision.  The Committee also considered procurement reform.


Last December, the Assembly adopted the Organization’s budget for the 2006-2007 biennium in the amount of $3.79 billion, (resolution 60/247 A) adding a proviso that would, “as an exceptional measure”, limit the first portion of the Secretary-General’s expenditures for 2006 to $950 million.  Further, it also decided that “in order to ensure the availability of resources for programme delivery, [it] will act in response to a request from the Secretary-General, at an appropriate time, for expenditure of the remaining funds”.  Such a request was made on 20 June.


When the Assembly adopted the budget on 23 December, the United States representative welcomed those arrangements, saying that they would permit ongoing United Nations operations and activities, while Member States continued discussions on implementing the reforms agreed at the 2005 World Summit.  At that time, he had expressed hope that progress on reform measures would be more than sufficient to support a continuation of the budget for the remainder of 2006.


Today, the representative of the United States said it was regrettable that since the 2005 World Summit in September, in which more than 150 world leaders had emphasized the need for reform, little had been seen in terms of results.  It was out of concern for the need for reform that the United States had asked expenditure authorization of only six months.  It was thus “with deep regret” that the United States found it necessary to oppose lifting the budget cap and to disassociate itself from consensus.  His country would pursue reform efforts to increase the effectiveness, transparency and accountability of the Organization and to end what Paul Volcker had called the “culture of inaction”.


Japan’s representative said he had hoped that more time would have been allowed to reach a broad-based consensus agreement on Friday on reform proposals, along with action on the spending cap.  He regretted that Japan had to disassociate itself now from consensus but hoped that in the plenary meeting of coming Friday his delegation’s position could be different.


Australia’s representative said that to lift the cap today would be premature in terms of the purpose for which the cap had been originally imposed by consensus, namely as a discipline on all to ensure that management reforms, necessary for the Organization to work effectively, needed to be put in place.


South Africa’s representative, speaking on behalf of “Group of 77” developing countries and China, welcomed the decision and expressed regret that the United States, Japan and Australia had chosen to dissociate themselves from the consensus.  At some point, those colleagues would need to help Members understand how it was possible to work for a common goal if in the end they would disassociate themselves.  The lifting of the cap without condition was very important, as the cap should not have been imposed in the first place.  He was pleased that the Committee had acted, as the spending cap had turned into “poison and abuse” and had begun to affect the trust needed to work together.  The Group was committed to rebuilding that trust, he said, but it was difficult to rebuild trust with colleagues that disassociated themselves.


On procurement reform, the Committee heard an introduction by Warren Sach, Assistant Secretary-General and Controller, of a detailed report on reform measures that included recommendations for reclassifications of existing posts and new posts, for which additional resources were required.  He said in 2005, an outside consultant had been engaged to undertake a study of procurement activities, following the emergence of problems related to the integrity of some of the procurement operations.  That study had revealed some opportunities for strengthening internal controls of the procurement operations.


He said the measures described in the report could not be achieved without adequate resources allocated to the Procurement Service.  Approval by the Assembly was being sought of all the proposed resource requirements, including the establishment of the additional posts.  Temporary arrangements would hinder the ability of the Procurement Service to recruit qualified candidates.


The related report of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced by that body’s Chairman Rajat Saha, noted that the Secretary-General’s report’s emphasis was on internal control issues identified by internal and external bodies.  The Advisory Committee expected that other procurement reform measures would be elaborated in greater detail in forthcoming reports.  Although the ACABQ would have preferred to deal with procurement comprehensively, it was explained that there was an urgent need for resources to implement necessary measures.  It recommended, therefore, approval of requested resources totalling $5.15 million.


Again speaking on behalf of the Group of 77 and China, South Africa’s representative said that due to late receipt of the relevant reports it would not be “prudent” to place Member States in a position where they were expected to take rush decisions on matters that could potentially impact on the management and oversight of billions of dollars, as well as the Organization’s reputation.  The Group reserved, therefore, the right to revert to the report in formal consultations in the sixty-first session when the Committee considered the matter.


The representative of Austria, speaking on behalf of the European Union, said measures to improve procurement were of utmost importance to enhance transparency, accountability and the ethical behaviour of staff within the Organization.  The recent reports on procurement in peacekeeping operations had


clearly illustrated a lack of adequate internal controls, accountability measures and resources.  While the expedient procurement in the field should take place without undue delay, the procurement practices must always follow the established financial rules and regulations.


In other business, Sharon Van Buerle, the Director of Programme Planning and Budget Division, introduced the Secretary-General’s report on arrangements and related resource requirements in respect of additional office accommodation for the Office of the United Nations High Commissioner for Human Rights (OHCHR) in Geneva.  The ACABQ Chairman, Mr. Saha said in that regard that the Advisory Committee supported the Secretary-General’s proposals.


Statements were also made by the representatives of the United Kingdom, Singapore and the Russian Federation.


The Fifth Committee will meet again at a date and time to be announced.



Background


The Fifth Committee (Administrative and Budgetary) met this afternoon to consider expenditure authorization for the biennium 2006-2007, additional office accommodation in Geneva for the Office of the United Nations High Commissioner for Human Rights (UNHCHR) and procurement reform.


Regarding the expenditure authorization, the Committee had before it a draft decision (document A/C.5/60/L.44) by which the Assembly would decide to authorize expenditure of the remaining funds appropriated in Assembly resolution 60/247 A. On 20 June, the Secretary-General had requested such authorization for the remainder of the current biennium, as the $950 million under the current “spending cap” was running out. (See Press Release GA/AB/3745 of 20 June.)


Last December, the Assembly adopted the Organization’s budget for the 2006-2007 biennium in the amount of $3.79 billion, adding a proviso that would, “as an exceptional measure”, limit the first portion of the Secretary-General’s expenditures for 2006 to $950 million.  Further, it also decided that “in order to ensure the availability of resources for programme delivery, [it] will act in response to a request from the Secretary-General, at an appropriate time, for expenditure of the remaining funds”.


When the Assembly adopted the budget on 23 December, the United States representative welcomed those arrangements, saying that they would permit ongoing United Nations operations and activities, while Member States continued discussions on implementing the reforms agreed at the 2005 World Summit.  He hoped that progress on reform measures would be more than sufficient to support a continuation of the budget for the remainder of 2006.


As for additional office accommodation for the Office of the United Nations High Commissioner for Human Rights (OHCHR), the Committee had before it a Secretary-General’s report (document A/60/899) on revised estimates to the 2006-2007 programme budget for additional office accommodations in Geneva for the Office of the United Nations High Commissioner for Human Rights (document A/60/899).  The expanded office accommodation in Geneva would give rise to a total additional requirement of $10.45 million, which would be financed through a combination of regular budget resources ($4.97 million) and extrabudgetary resources ($2.76 million) on the basis of the current OHCHR staff ratio of 53 per cent regular budget to 47 per cent extrabudgetary, together with a host Government contribution of $1.54 million.


The Secretary-General requests the Assembly to take note with appreciation of the host Government’s intention to contribute $1.54 million towards the total requirements for additional office accommodation in Geneva and decide to appropriate a total additional amount of $4.97 million under the 2006-2007 programme budget.


In its related report (document A/60/7/Add.42), the Advisory Committee recognizes the OHCHR’s immediate needs for additional office space and the need for a rapid, practical solution and has no objections to the solutions proposed for OHCHR in the Secretary-General’s report.  The Advisory Committee, therefore, recommends acceptance of the Secretary-General’s proposals.


On United Nations reform, the Fifth Committee (Administrative and Budgetary) had before it the fifth detailed report (document A/60/846/Add.5) on Procurement reform.  That report gives detailed proposals on aspects from the Secretary-General’s report on investing in the United Nations:  for a stronger Organization worldwide (document A/60/864).


According to the report on procurement reform, the value of procurement had increased significantly over the past two years:  from $1.01 billion to $1.77 billion, due to the unprecedented surge in peacekeeping operations.  That had put severe pressure on the staff of the Procurement Service, as well as the procurement staff in the peacekeeping missions.  In the summer of 2005, an outside consultant was engaged to review internal controls of the procurement operations at Headquarters, following the emergence of problems in that regard.


In the report, the Secretary-General is presenting strategic procurement reform recommendations, focusing on:  strengthening internal control measures; optimization in acquisition management; and strategic management of procurement.  The report includes measures that will be pursued over the next 18 months subject to the availability of resources.  Also, having reviewed the findings and recommendations of the report on the internal control in procurement and the Office of Internal Oversight Services (OIOS) audit of field procurement, the Secretariat had taken swift action to implement recommendations to further strengthen internal controls.


It should be recognized, according to the report, that with the current and anticipated workload, present resources allocated are not sufficient to effectively meet the medium- to long-term requirements of the Organization.  “The injection of additional resources will ultimately lead to a goal of regaining trust; improving efficiency and cost-effectiveness of the procurement system with a strengthened internal control mechanism.”


The Secretary-General recommends that the General Assembly, under the support account for peacekeeping operations for the period from 1 July 2006 to 30 June 2007 a resource request of:  $4.84 million for the Procurement Service representing 7 posts and non-post resources; $303,000 for the Office of Mission Support/Department of Peacekeeping Operations representing 2 posts and non-post resources; $437,300 for the Office of the Under-Secretary-General for Management, representing the cost of 3 posts and non-post resources; and $560,300 for the General Legal Division/Office of legal Affairs, representing the cost of 4 posts and non-post resources.


The Secretary-General also recommends the approval of the reclassification of the D-1 Chief of Procurement post to the D-2 level and the related amount of $29,100.


In its related report (document A/60/904), the Advisory Committee on Administrative and Budgetary Questions (ACABQ) noted that the Secretary-General’s report’s emphasis was on internal control issues identified in a report of the Office of Internal Oversight Services (OIOS) (document A/60/717) and a study by an outside consultant.  The Advisory Committee expects that other procurement reform measures will be elaborated in greater detail in forthcoming reports.  Although the ACABQ would have preferred to deal with procurement comprehensively, it was explained that there was an urgent need for resources to implement necessary measures.   Under those circumstances, the Committee offers some preliminary observations without prejudice to what it may recommend following its consideration of other, forthcoming reports on procurement.


According to its report, the Advisory Committee welcomes the various measures being taken to segregate duties and processes so as to avoid conflict of interest and to increase transparency.  Finalized ethics guidelines for procurement staff should be issued expeditiously and in all working languages.  Recognizing the importance of training for procurement staff, the Advisory Committee requests that information on the required professional qualifications for procurement staff, including certification, be provided in the upcoming report on human resources management reform.


As the procurement process is unduly slow and involves multiple and duplicative steps, the Committee trusts that a review will promote efficient delivery of services, both at Headquarters and in the field.  It also trusts that industry experts to be engaged in the review in order to align current procurement process to industry practices will identify practices and models applicable to the United Nations environment.  The Committee encourages the Secretariat to benefit from the experience of other organizations of the United Nations system.  In that regard, the Committee highlights the usefulness of the Inter-Agency Working Group on Procurement.


Regarding the Secretary-General’s section on strategic management of United Nations procurement, the Advisory Committee notes that the career development programme is described in very general terms and is not ripe for consideration at this stage.  As for trends in procurement from developing countries and countries with economies in transition fro 2001 to 2005, the Committee requests that information be provided to the Assembly on the statistical analysis employed in the report’s tables, since there are a number of factors that should be taken into account in the evaluation of the data, including rules of origin.  It also encourages the Secretariat to explore additional ways to promote procurement from developing countries and countries in transition other than using business seminars.


The Advisory Committee in its report states that, while it is clear that the proposals for procurement reform merely represent “a stage in a process”, it is equally clear that additional resources are urgently required to move that process forward.  It recommends, therefore, approval of the requested resources totalling $5.15 million, comprising $3.19 million recommended for deferral in the report of the Advisory Committee on the support account (document A/60/807), $1.93 million in additional resources requested for the support account, and $29,100 under the regular budget.


Expenditure Authorization for Biennium 2006-2007


The Committee’s Chairman, JOHN ASHE ( Antigua and Barbuda), proposed, based on consultations he had had with several delegations, to postpone formal consideration of the draft decision on expenditure authorization contained in A/C.5/60/L.44 until 5 p.m. to allow for further consultations.


DUMISANO KUMALO ( South Africa), speaking on behalf of the Group of 77 developing countries and China, said his Group was ready to take action now, but was willing to go along with a postponement until 5 p.m.  He reminded the Committee that, when in December a decision on the budget had been taken, it had been made clear that upon the Secretary-General’s request for further expenditure authorization, it would be granted to him.  The Secretary-General had submitted such a request to the Committee and the time to act had come.  The Group of 77 and China was ready to respond accordingly.


JOHN R. BOLTON ( United States) said his delegation agreed to a two-hour delay.  He did not recognize the history of the expenditure gap as just given.  There was no “automaticity” of action.  The decision expected to be taken at 5 p.m. should depend on the consultations to be held.


The meeting was then suspended.


Consideration of the item resumed at 5:35 p.m.  During negotiations, delegates received a letter from General Assembly President Jan Eliasson, who called for lifting the spending cap and drew attention to accomplishments in reform and implementation of the 2005 World Summit Outcome document.


JOHN R. BOLTON ( United States) said that, last September, over 150 world leaders had singed the World Summit Outcome that had identified a number of essential reforms.  Sadly, 10 months since that meeting, little had been seen in terms of results.  Too often delegates were bogged down in debates about process.  It was out of concern for the need for reform that the United States had asked expenditure authorization of only six months.  It was not in the long-term interest of the United Nations to continue to delay reforms.


He said it was thus with deep regret that the Untied States found it necessary to oppose lifting the budget cap and to disassociate itself from consensus.  He looked forward to action on Friday on further concrete steps.  His country would also pursue reform efforts through concrete measures to increase the effectiveness, transparency and accountability of the Organization and to end, what Paul Volcker had called the “culture of inaction”.


KENZO OSHIMA ( Japan) said it was clear that a more efficient and effective United Nations was needed and that a reformed United Nations was in everybody’s interest.  His country had submitted a number of substantive proposals on reforms, including one on mandate review.  He had hoped that more time would have been allowed to discuss those proposals in order to reach a broad-based consensus agreement on Friday along with action on the spending cap.  He regretted that Japan had to disassociate itself from consensus.  He hoped that, during the coming two days, negotiations would bear tangible results so that in the plenary meeting on Friday his delegation’s position could be different.


ROBERT HILL ( Australia) also disassociated himself from the consensus to lift the spending cap today.  He regretted that, as he strongly believed the Committee operated better when it operated by consensus.  However, to lift the cap today would be premature in terms of the purpose for which the cap had been originally imposed by consensus, namely as a discipline on all to ensure that management reforms, necessary for the Organization to work effectively, needed to be put in place.  If that was the purpose for which that discipline had been accepted, it followed that reasonable progress was needed before the cap was lifted.


In his view, reasonable progress had not yet been achieved, he said.  He appreciated the guidance by the General Assembly President, which included headings in many of the areas where he would like to see agreement.  Australia would work over the next two days to work positively and constructively towards achieving the important reform outcomes.  Australia had demonstrated that commitment by the document it had put forward, which set out a modest but important step forward in the sort of management reforms necessary to meet the commitment by leaders at the end of last year.  He was pleased to hear that the Fifth Committee would continue meeting tonight.  His delegation would contribute constructively in that regard.  He hoped that by Friday, the Committee would be able to stand together and acknowledge that reasonable reform in critical areas had been achieved.


The Committee then adopted draft resolution A/C.5/60/L.44 without a vote.


DUMISANI KUMALO (South Africa) speaking on behalf of Group of 77 developing nations and China, said he was pleased with the decision to lift the spending cap by consensus.  He regretted that the United States, Japan and Australia had chosen to dissociate themselves from the consensus.  At some point, those colleagues would need to help members understand how it was possible to work for a common goal if in the end they would disassociate themselves.  Much good had been done.  The Group was proud of the contribution it had made and was committed to working even harder between now and 30 June.  The lifting of the cap without condition was very important, as the cap should not have been imposed in the first place.


On 23 December 2005, the language used was that the General Assembly would act in response to a request from the Secretary-General at an appropriate time, he said.  The Secretary-General had now said that the time had come to request that authorization be granted.  The time had come to act.  No one had been taken by surprise in asking that the spending cap be lifted by consensus.  The Group had been ready to take action on 20 June.  He was pleased that the Committee had acted, as the spending cap had turned into “poison and abuse” and had begun to affect the trust needed to work together.  The Group was committed to rebuilding that trust.  It was difficult to rebuild trust with colleagues that disassociated themselves.  The Group would work day and night to ensure that the United Nations was strengthened as an Organization.


GERHARD PFANZELTER ( Austria) speaking on behalf of the European Union, said he had joined consensus on lifting the cap.  The United Nations ability to function and deliver services was imperative to the Union and indeed to all.  The Union was deeply grateful to the General Assembly President for his tireless efforts to bridge the gap, to create an atmosphere of trust and show the way ahead.  His letter of 28 June reflected the understanding of key players on what needed to be done in the days ahead.  His letter also showed that a remarkable amount of reform had been achieved.  The Committee would need to use Thursday and Friday to make an important breakthrough.


The lifting of the cap by consensus should serve to energize the Committee in facing the taxing work ahead of it, he said.  If all partners worked in a constructive spirit, the Committee would be able to conclude the session successfully.  He appealed to all delegations to use the time available and come up with good results.  All partners must demonstrate that tangible progress could be made on the path of reform.  Tangible progress was needed on Thursday and Friday.  That would be possible, not in a spirit of polarization, but in a spirit of global partnership.


KAREN PIERCE ( United Kingdom) said, in support of Austria’s statement on behalf of the European Union, that a decision on the spending cap should be made by consensus.  Her delegation would work hard during the coming two days to secure agreement on much-needed reforms.  She hoped that on Friday a situation would appear where all Member States could join consensus.


Procurement Reform


Introducing the Secretary-General’s report on procurement reform as contained in document A/60/846/Add.5, WARREN SACH, Assistant Secretary-General and Controller, said procurement had been one of the major areas of focus in the reform process over the past 10 years.  In the summer of 2005, an outside consultant had been engaged to undertake a study of procurement activities, following the emergence of problems related to the integrity of some of the procurement operations.  That study had revealed some opportunities for strengthening internal controls of the procurement operations.  A subsequent management review of peacekeeping operations by the Office of Internal Oversight Services (OIOS) also contained substantive observations on a number of procurement cases at Headquarters and peacekeeping operations.


He said the measures described in the report could not be achieved without adequate resources allocated to the Procurement Service.  In addition to the resources requested in document A/60/727 on the Support Account for the Peacekeeping Operations (basically 11 posts), the Secretary-General proposed new additional resources, including the reclassification of a D-1 post to the D-2 level, a new D-1 post, four P-4 posts, one P-3 post and non-post resources for the Procurement Service.  Resources requested for the Department of Peacekeeping Operations, the Headquarters Committee on Contracts and the Office of Legal Affairs to be financed under the Support Account that related to procurement activities were also summarized in the report.


He said approval by the Assembly was being sought of all the proposed resource requirements, including the establishment of the additional posts.  Temporary arrangements would hinder the ability of the Procurement Service to recruit qualified candidates.


RAJAT SAHA, Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced that body’s report on the matter as contained in document A/60/904.


KAREN LOCK (South Africa), speaking on behalf of the Group of 77 developing countries and China, said the Group attached great importance to Member States collective efforts to strengthen United Nations oversight and auditing bodies.  They were crucial matters that had to be reviewed in a comprehensive manner in order to ensure that the Assembly’s decisions provided a solid basis for the functioning of the oversight bodies.  It was, therefore, imperative that Member States received the reports of the Secretary-General and the ACABQ in a timely manner so as to enable the Committee to treat the proposals with the seriousness they deserved.


She noted that when the Assembly established the Independent Audit Advisory Committee in December 2005, Member States had not been able to finalize consideration of its proposed terms of reference due to time constraint and pressure on the Committee to conclude various other time-bound matters of great importance.  Member States had felt that the Secretary-General’s proposal required careful consideration so as to ensure that the final terms of reference would be robust enough to enable the Committee to meet the desired objective of strengthening the Assembly’s ability to discharge its oversight responsibility.  Acting under pressure, the Committee had established the Independent Audit Advisory Committee without agreeing on its terms of reference, role, membership criteria and relationship with other parts of the oversight and governance systems.  Member States had been informed that the governance review, which would start in 2006, would consider those important aspects.


Member States would have to assess how the proposed changes in one part of the system, if accepted, might strengthen other parts, which was one of the reasons why Assembly resolution 60/248 had requested the Secretary-General, in proposing the terms of reference, to ensure coherence with the outcome of the ongoing review of oversight.  As the outcome of the governance review and external evaluation of audit and oversight had not been issued or considered by the ACABQ and the Committee, she supported the proposed deferral of the report (document A/60/846/Add.7) to the sixty-first session when the Committee would also receive the outcome of the governance review and external evaluation.  In the absence of any decision by the Assembly on the qualification of experts, the Committee’s composition and the selection process, the rationale for the ACABQ’s proposal to provide general temporary assistance was not clear.


She recalled that Member States had requested that an external evaluation be undertaken to, among other things, consider the operational and budgetary independence of the Office of Internal Oversight Services (OIOS).  The findings of that external evaluation, as well as OIOS’ comments, had not been finalized for submission through the ACABQ to the Fifth Committee.  It was for that reason that Member States had agreed today to provide general temporary assistance to the OIOS, as had been done in December 2005, to ensure its effective functioning until the Committee received the findings of the evaluation and the assessment of the OIOS.  The Group, therefore, was not clear as to the import of the observations of the Advisory Committee in paragraph 12 of its report.  It was not clear if the observation related to some of the proposals contained in the Independent Audit Advisory Committee’s draft terms of reference that addressed its envisaged interaction with the OIOS vis-à-vis that of the ACABQ.  While recognizing that Member States would consider questions related to resource requirements and independence of the OIOS in the sixty-first session, the Group would appreciate a clarification of the relationship between the Advisory Committee’s observations and the matter before the Committee today.


Turning to the report on procurement reform, she stressed the importance the Group attached to improving the United Nations procurement system.  Unfortunately, the Committee had only received the ACABQ’s report on 27 June and would not be able to finalize negotiations on that important aspect in the remaining two days of the session.  She did not believe it was prudent, therefore, to place Member States in a position where they were expected to take rush decisions on matters that could potentially impact on the management and oversight of billions of dollars, as well as the Organization’s reputation.  The Group reserved the right to revert to the report in formal consultations in the sixty-first session when the Committee considered the matter.


In the meantime, she trusted that the Secretariat would prepare supplementary information to respond to Section V of General Assembly resolution 60/260 in which the Assembly set out elements to be responded to in the detailed report on procurement reform.  In that regard, she expected concrete proposals to be submitted to the Assembly.  She also noted the ACABQ’s comment that some aspects of procurement reform were not well developed in the report.  She trusted that the Secretariat would prepare supplementary reports that enabled Member States to take a more comprehensive approach when it reverted to procurement reform in the sixty-first session.


ENNO DROFENIK ( Austria), speaking on behalf of the European Union, said the Union attached great importance to the procurement reform as it constituted an essential part of the ongoing management reform process.  He welcomed the Secretary-General’s report, which outlined the strategic procurement reform actions for the near future, and fully supported the efforts to strengthen the internal control measures, to optimize United Nations acquisition and procurement management in order to reduce the acquisition costs and to improve strategic management of United Nations procurement.  Such measures were of utmost importance to enhance transparency, accountability and the ethical behaviour of staff within the Organization.  The recent reports on procurement in peacekeeping operations had clearly illustrated a lack of adequate internal controls, accountability measures and resources.  While the expedient procurement in the field should take place without undue delay, the procurement practices must always follow the established financial rules and regulations.


The Secretary-General, after having reviewed the report’s findings and recommendations on the internal controls in procurement and the OIOS audit of field procurement, had identified some recommendations to further strengthen internal controls over the procurement process.  He welcomed the various measures being taken to segregate duties and processes in order to avoid conflict of interest and increase transparency and accountability and to promote integrity and ethics within the Organization.  There were a number of forthcoming reports which might have an impact on procurement reform.  Due to that reason and the late issuance of the procurement reports before the Committee, the Committee might not be in a position to address the substance of the reports in the given time frame.  However, based on the urgency and importance of the issue the Union was ready to make a decision on the additional resources and to revert to the consideration of the procurement policies and regulations during the main part of the sixty-first session.


The request for additional capacity for Procurement Service had been addressed in detail in the context of the Support Account, and the Union remained actively engaged in the discussion in that regard.  He trusted that the additional resources would improve the efficiency and cost-effectiveness of the United Nations procurement system.


BENJAMIN GARCIA ( United States) said procurement reform must be an ongoing management priority.  Without accountable, cost-effective, efficient and transparent procurement practices, the United Nations would not have its essential goods and services effectively and efficiently managed, billions of dollars of contributions might be ill spent and/or not properly accounted for.  It was unacceptable that so many field procurement positions remained vacant and that those performing those functions lacked sufficient knowledge.  “This is simply intolerable and must be addressed now without delay”, he said.


He said that, as noted in the report, steps had been under way to strengthen internal control mechanisms.  The Secretariat had taken initiatives towards strategic sourcing, partnering with other United Nations entities and a more comprehensive strategic management of United Nations procurement worldwide through consideration of career development frameworks for model career paths for procurement professionals and a review of procurement job functions.


His delegation realized that having effective and efficient United Nations procurement operations was resource dependent.  He, therefore, concurred with the Advisory Committee’s recommendations on resources but emphasized that more proactive actions needed to be taken immediately, particularly to improve oversight and strengthen internal controls, as well as to establish clear lines of authority for Headquarters and field personnel.  He called on the Secretary-General to ensure that the ongoing investigations regarding procurement matters be concluded expeditiously.


RAZIFF ALJUNIED ( Singapore) asked who the outside consultant was that had been mentioned by Mr. Sach and who had engaged him.


Mr. SACH answered that the outside consultant was Deloitte, which was a different legal entity from Deloitte and Touche, but had cooperation arrangements.  The decision to engage the consultant had been taken after a discussion with the Secretary-General and had been effected by the Under-Secretary-General for Management.


Mr. ALJUNIED ( Singapore) said he supported the proposal that the issue be deferred to the sixty-first session.  Procurement was a complex issue that involved large amounts of money and staff.  Many recent criticisms had revolved around procurement and apparent transgressions by United Nations staff.  Some staff had been put on administrative leave for six months now, without formal charges.  A senior United Nations official had also played up media speculation that the United Nations was riddled with corruption.  It behoved the Committee, therefore, to address the topic in some detail, and as the report had just been completed, all needed time to study it.


He said the report had been prepared taking into account the findings of a study by Deloitte and Touche.  Committee members had not been given an opportunity to seriously study that report.  Instead, it had been given a cursory presentation.  Those unevaluated findings of the Deloitte and Touche report had apparently been used as reference by the Secretariat to draw conclusions.  He was not convinced that the findings of that report were robust and was, therefore, sceptical that the findings should have been used in the way they were.  Until a complete evaluation of the Deloitte and Touche report was given, he would have serious difficulty in considering the procurement report.


There were other issues related to procurement that also needed to be addressed, he said, such as the ongoing OIOS investigations into alleged procurement transgressions.  Those investigations should be completed as a matter of urgency.  Eight staff who had not been formally charged remained in limbo, which was a matter of due process and basic decency.  The outcome of the investigations would also influence his views on the procurement process.  “If this was all a wild goose chase, then we will also need to look into the reasons for that”, he said.


HITOSHI KOZAKI ( Japan) said the issue of procurement should be given priority focus in management reform.  Internal control and accountability mechanisms should be strengthened in order to remedy the current situation.  Due to the late submission of reports, however, detailed discussion on the matter was not possible.  He took note of the report as an update of the procurement report.  He understood that the Committee would discuss the issue as a matter of priority at the sixty-first session.  Japan would continue to work in that regard in a constructive manner.


ANDREY V. KOVALENKO ( Russian Federation) noted that the General Assembly in December 2005 had agreed in principle with the idea of establishing an Independent Audit Advisory Committee and had asked the Secretary-General to submit further ideas on the terms of reference for that committee, taking account of the review of the management and oversight system in the United Nations.  The General Assembly should come back to considering the terms of reference and, consequently, the adoption of decisions on the Committee’s practical establishment, including issues related to the selection and appointment of its members within the context of the discussion of the report being prepared by the Secretary-General on oversight and management.


He said he agreed with the ACABQ that the conclusions as a result of the review of oversight and management system could impact on the function and mandates of the terms of reference.  It was also important to obtain the expert view of the United Nations Auditors Commission and the panel of external auditors on the terms of reference.  The Commission was still studying the issue and including the question of to what extent the terms respected the principle of independence of external auditors.


One of the key issues of the committee, as a subsidiary body of the General Assembly, was the selection of its members.  The criteria for appointment of members also depended on the terms of reference.  Until the Assembly had endorsed the terms of reference, the selection of members could not be launched.  It was a question of substance.  Neither the Secretariat nor the Secretary-General could take part in the selection of Committee members.  That was unacceptable for his delegation.  The idea of the Secretary-General nominating individuals went against best practices and was not in line with the Committee’s independence.  His delegation could not agree with the proposal to launch the selection process until the Assembly considered the terms of reference and defined the principles and system for establishing its membership.


Mr. SAHA, addressing South Africa’s question regarding the report on the Independent Audit Advisory Committee, said the Advisory Committee had included an explanation in paragraph 10 of its report, saying it was not in a position to pronounce itself on specific proposals.  However, once the terms of reference had been approved, there might be a need for some organizational and preparatory work.  The Advisory Committee had, therefore, recommended approval of resources for six months.  Regarding another question, he said paragraph 12 of its report had merely reiterated a previous recommendation.  The Assembly would, however, make the final decision on how the budget would be submitted.


Addressing Singapore’s request, Ms. SACH said the Deloitte and Touche report had been put on the website some time ago.  Nevertheless, he would be happy to provide a comprehensive presentation on the report.



Mr. ALJUNIED ( Singapore) said he would appreciate if Christopher Burnham, the Under-Secretary-General for Management could present the report.  It would be nice if he could finish what he had not done in terms of providing a comprehensive presentation.


Additional Office Accommodation in Geneva for Office of United Nations High Commissioner for Human Rights


SHARON VAN BUERLE, Director of Programme Planning and Budget Division, introduced the Secretary-General’s report on arrangements and related resource requirements in respect of additional office accommodation for the OHCHR in Geneva.  In paragraph 130 of the Secretary-General’s report on the revised estimates of the 2005 World Summit Outcome, it was stated that the central support cost requirements identified in that report represented initial estimates and might be revised subsequently in the light of, among other things, the need to identify an additional office building in Geneva to accommodate the additional staff for OHCHR due to lack of available space at the Palais Wilson.  Accommodating additional staff at the Palais Wilson was not possible as it would not only aggravate the existing working conditions but would breach the local fire safety codes and endanger the safety and health of staff owing to additional stress placed on the building’s electrical infrastructure.  As regards office accommodations at the Palais des Nations, there were currently some 2,780 offices within the compound with an occupancy rate of 100 per cent.


As a result, she added, part II of the report addressed the acute shortage of office space in Geneva, and the efforts made jointly by OHCHR, the United Nations Office at Geneva and the Building Foundation for International Organizations (FIPOI), which dealt with office accommodation for Geneva-based international organizations on behalf of the host country, to examine potential locations in Geneva and identify a suitable solution.  For reasons detailed in the report, the G. Motta 48 site had been the final selection.  The lease agreement would be concluded between FIOPI and the landlord.  However, as the draft agreement contained the option of a sublet to United Nations Office at Geneva, with the obligation by the United Nations Office at Geneva to take over the clauses and conditions of the contract, the salient terms and conditions of the draft lease agreement were presented in the report.


It was proposed that the total estimated requirements, which amounted to
$10.4 million, be offset by an amount of $1.2 million already approved by the Assembly in its resolution 60/246, extrabudgetary resources amounting to $2.7 million and a contribution from the host Government of some $1.5 million.  Taking into account the offsets, the additional requirements under the regular budget would amount to some $4.96 million.


Mr. SAHA, introducing the Advisory Committee’s report contained in document A/60/904, said the Committee recognized the immediate need for additional office facilities and recommended acceptance of the Secretary-General’s proposals.


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For information media • not an official record
For information media. Not an official record.