Fifth Committee, Resuming Session, Considers Budgets for Peacekeeping Missions, Including Issue of Funding Active Missions with Cash Surpluses from Closed Ones

7 May 2012
GA/AB/4027

Fifth Committee, Resuming Session, Considers Budgets for Peacekeeping Missions, Including Issue of Funding Active Missions with Cash Surpluses from Closed Ones

7 May 2012
General Assembly
GA/AB/4027
Department of Public Information • News and Media Division • New York

Sixty-sixth General Assembly

Fifth Committee

31st Meeting (AM)


Fifth Committee, Resuming Session, Considers Budgets for Peacekeeping Missions,


Including Issue of Funding Active Missions with Cash Surpluses from Closed Ones


Delegates offered a range of views on how to better manage the United Nations budget for both active and closed peacekeeping missions, as the Fifth Committee (Administrative and Budgetary) opened the second part of its resumed sixty-sixth session this morning and adopted its programme of work.


Several speakers said peacekeeping budgets must be based on their approved mandates and the real situation on the ground, not arbitrary, across-the-board cuts.  Some discussed ways to alleviate the crippling impact of inflation on troop-contributing countries, while others weighed in on options to resolve unpaid assessments, accounts payable and other liabilities of closed operations.


Chile’s representative, speaking on behalf of the Community of Latin American and Caribbean States (CELAC), reiterated his strong support for the United Nations Stabilization Mission in Haiti (MINUSTAH) and said it must be given the necessary resources to properly fulfil its mandate.  He stressed the need to create a methodologically sound mechanism to review reimbursement rates to troop contributors in the future and called on the Senior Advisory Group working towards that goal to make all efforts to devise a long-term solution in order to avoid the need for one-time payment measures.


Nigeria’s representative stressed the need for adequate funding for peacekeeping operations, particularly in strife-ridden African regions, to ensure proper implementation of mandates and to prevent further hardship of troop-contributing countries.  He lauded the Secretariat’s move to take into account the particular circumstances of each peacekeeping operation during budget preparations and encouraged it to furnish sufficient information on how those measures would be applied in each case.


Australia’s representative, who also spoke on behalf of Canada and New Zealand, called for sufficient financial backing for the United Nations Integrated Mission in Timor-Leste (UNMIT), which recently had supported the smooth and peaceful holding of presidential elections and was poised to hand over responsibility to the Government of Timor-Leste by year’s end.


Echoing that call, Brazil’s representative said that throughout and beyond the reconfiguration period, UNMIT must have the necessary resources to further Timor-Leste’s gains towards stability.  Noting that transition periods presented particular risks to stability, he expressed concern over the Secretary-General’s proposed cuts in UNMIT’s budget and said the reduction of resources for some operational areas were unjustified and did not correlate to the situation on the ground. 


María Eugenia Casar, Assistant Secretary-General and United Nations Controller, introduced the Secretary-General’s reports on MINUSTAH, UNMIT and six other active and closed peacekeeping missions, including the United Nations Mission in the Central African Republic and Chad (MINURCAT), United Nations Mission in Ethiopia and Eritrea (UNMEE), United Nations Observer Mission in Georgia (UNOMIG), United Nations Mission in the Sudan (UNMIS), United Nations Disengagement Observer Force (UNDOF), United Nations Interim Force in Lebanon (UNIFIL) and the United Nations Mission for the Referendum in Western Sahara (MINURSO).  Collen Kelapile, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced that body’s related reports.


Ms. Casar also introduced the Secretary-General’s report on the updated financial position of closed missions as of 30 June 2011.  Mr. Kelapile introduced the Advisory Committee’s related report, which backed the Secretary-General’s recommendation that the Assembly retain the $27.56 million in cash surpluses from 18 of the Organization’s 23 closed missions in light of the Organization’s cash requirements during the 2010/11 and 2011/12 financial periods.


However, he explained, the Advisory Committee was concerned at the increase in borrowing from the accounts of closed peacekeeping missions with cash surpluses in order to meet cash flow requirements of active peacekeeping missions with cash deficits, mainly because of the unpredictability in the receipt of assessed contributions.  Indeed, the Committee felt that the cash flow requirements of active missions should be delinked from the cash surpluses of closed missions that should be returned to Member States.


Similarly, Switzerland’s representative, who also spoke on behalf of Liechtenstein, criticized the continued practice of cross-borrowing from closed missions to provide liquidity for active ones, and called on the Secretariat to make concrete proposals for a sustainable alternative.  He regretted that the Secretary-General had yet to present a convincing solution to the Organization’s dysfunctional accounting practices for peacekeeping operations, particularly the sums owed to countries that had contributing troops to missions that had closed.


Speakers also weighed in on the financial reports and audited financial statements of the Board of Auditors on the peacekeeping operations from the 1 July 2010 to 30 June 2011 period, which were introduced by Liu Yu, Chair of the Audit Operations Committee.  Ms. Casar also introduced the Secretary-General’s report on implementing the Board’s recommendations, while Mr. Kelapile presented the Advisory Committee’s related report.


Algeria’s representative, speaking on behalf of the Group of 77 developing countries and China, requested the Secretariat to draw on successful experiences and lessons learned in improving the financial and administrative management of peacekeeping operations — with particular attention to systemic shortcomings and recurring, interrelated problems like the low rate of implementing the Board’s recommendations.  Similarly, the Republic of Korea’s representative called for long-term measures to address the root causes of such recurring problems as the high vacancy rate and outdated systems.


Also speaking today were representatives of Côte d’Ivoire (on behalf of the African Group), United States, Japan, Dominican Republic and Syria.  A delegate from the European Union also spoke.


The Committee will reconvene at 10 a.m. on Wednesday, 9 May, to consider appointments to fill vacancies in the International Civil Service Commission and cross-cutting issues related to the administrative and budgetary aspects of financing peacekeeping operations.


Background


Opening the second part of its resumed sixty-sixth session this morning, the Fifth Committee (Administrative and Budgetary) considered the financial and Board of Auditors’ reports as well as administrative and budgetary aspects of the financing of United Nations peacekeeping operations.


On the first topic, it had before it the financial report and audited financial statements for the 12-month period from 1 July 2010 to 30 June 2011 and report of the Board of Auditors, volume II:  United Nations peacekeeping operations (document A/66/5/Vol. II),which presents the results of audits of the attached statement of income and expenditure, and changes in reserves and fund balances for peacekeeping operations for the year ended 30 June 2011; the statement of assets, liabilities and reserves and fund balances as at that date; the statement of cash flows for the year then ended, other related statements and schedules; and the notes to the financial statements.


In the Board’s opinion, “the financial statements present fairly, in all material respects, the financial position of the United Nations peacekeeping operations as at 30 June 2011 and the results of operations and cash flows for the period then ended, in accordance with the United Nations system accounting standards”.


For the financial year ended 30 June 2011, total income decreased to $7.84 billion from $8.10 billion for the previous financial year, owing mainly to a decrease in assessed contributions and interest income.  Overall expenditure also decreased from $7.62 billion to $7.57 billion.  As a result, there was an excess of income over expenditure of $266 million, compared with an excess of $483 million for the preceding financial year. 


The Secretary-General’s report on implementation of the recommendations of the Board of Auditors concerning United Nations peacekeeping operations for the financial period ended 30 June 2011 (document A/66/693) notes that the Administration concurs with most of the Board’s recommendations, stating that many of the comments of the Secretary-General have been duly reflected in the Board’s report.  In an effort to reduce repetition and streamline documentation, the report provides additional comments only where required, as well as information on the status of implementation, the office responsible, the estimated completion date and the priority for each recommendation.


In addition, it contains updated information on the status of implementation of the recommendations of the Board relating to prior periods that were reported by the Board as not having been fully implemented.


Also before the Committee was the related report of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) (document A/66/719), in which the Advisory Committee commends the Board of Auditors for what it calls “the continued high quality of its report”, which enabled its consideration during the early part of the Committee’s session.  It states that the Board provided important insights in terms of resource and management issues pertaining to peacekeeping operations.  It remains concerned over the level of financial risk to which the Organization is exposed due to managerial weaknesses as well as shortcomings in internal controls and oversight noted by the Board.  Ensuring that appropriate action is taken to address such weaknesses is an integral component of an effective accountability framework.  If planned and implemented effectively, a transition to new accounting standards or to new processes and procedures should not lead to recurring audit recommendations.


On the second topic, the Committee had before it the Secretary-General’s report on the updated financial position of closed peacekeeping missions as at 30 June 2011 (document A/66/665).  The report states that five missions had cash deficits owing to outstanding payments of assessed contributions, while 18 had cash surpluses available for credit to Member States totalling $27.56 million.  As at 30 June 2011, $63.1 million was owed to troop- and police-contributing countries in closed mission with cash deficit. 


The Secretary-General recommends that the Assembly retain the $27.56 million in the light of the experience regarding the Organization’s cash requirements during the 2010/11 and 2011/12 financial periods.  He proposes that this net cash balance, combined with the $41.5 million borrowed by active missions as of 30 June 2011, could provide $69.1 million of cross-borrowing capacity to manage cash shortfalls in active peacekeeping missions. 


In the Advisory Committee’s related report (documentA/66/713andCorr.1), it recommends that the Assembly approve the retention of the $27.6 million net cash balance in light of the reduced net cash balance as of 30 June 2011 and the recent increase in the peak level of borrowing from closed peacekeeping operations.  It does not agree with both options proposed by the Secretary-General (document A/66/665, paragraphs 13 and 14) to use a portion of the $335.5 million unencumbered balance of the special account for the African Union-United Nations Hybrid Operation in Darfur (UNAMID) as of 30 June 2011 to settle outstanding dues to Member States in closed peacekeeping missions with cash deficits. 


The Advisory Committee recommends instead that the Assembly ask the Secretary-General to submit at its second resumed sixty-seventh session a report on concrete proposals to address the issue of outstanding dues to Member States from closed missions that are in net cash deficit, and for a long-term solution to the cash shortfalls of active missions that currently can only be met by borrowing from closed peacekeeping missions.


On the financing of United Nations peacekeeping operations, the Committee also had before reports on the United Nations Mission in the Central African Republic and Chad (MINURCAT) (documents A/66/646 and A/66/718/Add.2), United Nations Mission in Ethiopia and Eritrea (UNMEE) (documents A/66/560 and A/66/718/Add.3), United Nations Observer Mission in Georgia (UNOMIG) (documents A/66/569 and A/66/718/Add.1), United Nations Mission in the Sudan (UNMIS) (documents A/66/608 and A/66/718/Add.5), United Nations Integrated Mission in Timor-Leste (UNMIT) (documents A/66/609, A/66/711, A/66/718/Add.8), United Nations Mission for the Referendum in Western Sahara (MINURSO) (document A/66/573, A/66/681, A/66/718/Add.6), United Nations Disengagement Observer Force (UNDOF) (documents A/66/556, A/66/683, Corr.1 and A/66/718/Add.10) and United Nations Interim Force in Lebanon (UNIFIL) (documents A/66/582, A/66/701, Corr.1 and A/66/718/Add.4). 


Statements


Committee Chair MICHEL TOMMO MONTHE (Cameroon) noted that the Committee had much to deal with both at Headquarters and in the field.  He called on all delegates to work together effectively during the current session.


MOURAD BENMEHIDI (Algeria), speaking on behalf of the “Group of 77” developing countries and China, said the draft programme of work should be adjusted according to the evolution of the general debates and informal consultations during the session and the availability of relevant documents.  As the Committee’s workload was considerable and demanding, the focus must be maintained on the financing of peacekeeping-related issues, and adequate time should be given to all items. 


He said that in addition to examining the peacekeeping budgets, the Committee must tackle three other priority issues.  Those included addressing the difficulties due to inflation factors that severely affected troop-contributing countries; exploring options to achieve a fair solution for unpaid assessments, accounts payable and other liabilities of closed peacekeeping missions, in order to settle outstanding claims with cash deficits; and ensuring that peacekeeping budgets were formed and presented based on their approved mandates and the real situation on the ground, not on arbitrary, across-the-board cuts.


He was clearly committed to concluding the session within the established four-week time frame, he said, opposing any attempts to extend the session, which had proved counterproductive in the past.  The time available was sufficient for considering all agenda items, and he urged all delegations to commit to “constructive negotiations” to ensure that the session was completed on time.


BROUZ RALPH COFFI (C ôte d’Ivoire), speaking on behalf of the African Group and aligning with the Group of 77, urged the Secretariat to ensure that supplementary information requested by Member States was provided in a timely manner to facilitate negotiations.  He expressed concern about significant cuts reflected in the budget proposals for many peacekeeping missions.  “It is the intention of this Group to scrutinize the basis on which these proposals have been developed and how best to ensure that mandates are effectively delivered and the security of all peacekeepers is not compromised,” he said.  He reiterated the African Group’s longstanding position that the budget of each mission should be considered on its own merit, based on specific mandates and taken into account the unique circumstances of each operation.


He said the safety and well-being of United Nations peacekeepers was of utmost importance to the Group.  It was imperative that concerns raised by troop-contributing countries on the sustainability of United Nations peacekeeping in that regard be addressed effectively.  The Group firmly believed that constructive dialogue within the Committee could lead to the session’s conclusion within the established time frame.  That could only happen if all delegations committed themselves to be guided by the General Assembly’s rules of procedure.  Moreover, the Committee’s business should be conducted in an open, transparent and all-inclusive manner.  “We must avoid negotiations in small groupings or in any other configurations that attempt to substitute this Committee,” he said.  “The African Group will not accept to be pushed into agreements based on package deals and which many may have been discussed outside of the framework of the Fifth Committee.”


OCTAVIO ERRÁZURIZ (Chile), speaking on behalf of the Community of Latin American and Caribbean States (CELAC), reiterated his strong support for MINUSTAH and said it must be given the resources to properly fulfil its mandate.  It must also stay as long as was necessary and welcome by the Haitian people.  Committed to helping their Haitian brothers and sisters towards stability, sustainable peace and development, CELAC contributed most of MINUSTAH’s troops and police.  “Any reductions in MINUSTAH’s budget should be based on the situation on the ground and not on arbitrary, across-the-board cuts,” he said.  It was imperative to strengthen the operational and organizational structure of peacekeeping missions and necessary, therefore, to discuss the financing of each mission based on its own merits and needs, not generalizations.  He welcomed progress in reimbursing Member States, but there was still room for improvements.  Refunds must be timely and efficient, and he encouraged the Secretariat to continue seeking practical ways to address the issue and give equal treatment to all missions.


Under current conditions, human and material resources of troop-contributing countries, especially developing countries, could be seriously affected, he said.  Continuing inflation and sustained price increases were imposing an unprecedented financial burden on troop contributors.   He noted the review under way of the methodology for reimbursement rates for troop costs and the important work of the Working Group on reimbursement of contingent-owned equipment, but said its recommendations fell far short of expectations.  He noted with satisfaction the creation of the Senior Advisory Group and the single additional payment to troop-contributing countries from 1 July 2011 to 30 June 2012.  He asked the Senior Advisory Group to work pragmatically towards a positive outcome.  Given the urgency to update rates of reimbursement to troop-contributing countries and to create a methodologically sound mechanism to review rates in the future, the Senior Advisory Group must make all efforts to finish its work on time and achieve a long-term solution that would avoid the need for one-time measures.


He regretted that the Assembly had been unable to appropriately consider the recommendations of various reports on the financial arrangements and backstopping of special political missions during its main session last year.  That was an issue of great importance to CELAC, particularly due to the distortion in the regular budget caused by the missions, which would worsen with time.  CELAC would address that issue in greater detail in the context of the forthcoming presentation of reports on the budgets of those missions.  CELAC was willing to consider, during the current session, the issues and recommendations of the International Civil Service Commission on the Organization’s rest and recuperation policy, which had been put forward in an addendum to its 2011 report. 


But CELAC would address only those issues raised in the addendum because they were urgent and, if not properly addressed, could seriously hamper the Organization’s ability to deliver its mandate in some of the most difficult environments, he said.  CELAC would not reopen any other elements of the Assembly’s decision on the matter last year.  However, it was highly unfortunate that Member States were advised in a manner that was not optimal and that the implications of the decisions were not fully weighted from a technical perspective.  That situation must not be repeated in future.


THOMAS MAYR-HARTING, Head of the European Union Delegation to the United Nations, said the Union intended to demonstrate its continued commitment to effective peacekeeping during the session.  As the largest collective financial contributor to the peacekeeping budget, the member States of the European Union would also closely examine the budgets of all peacekeeping missions, as well as the support functions, with a view to providing them with adequate financing to carry out their mandates.  The Secretary-General’s proposed budgets for peacekeeping missions for the financial period 2012/13 totalled $7.4 billion.  Despite the Union’s ongoing commitment to providing the missions with the necessary resources, the global economic crisis had imposed financial constraints on United Nations Member States.  Thus, strict budgetary discipline was required to ensure that the resources were used effectively, efficiently and transparently.


He expressed the Union’s support for the Global Field Support Strategy and welcomed the close involvement of the membership and relevant United Nations bodies in that process.  He urged the Secretariat to ensure that the Strategy produced economies of scale and savings, as well as strengthened accountability and improved delivery of services on a global and regional basis, for a more rapid and effective deployment of missions.  While many decisions required compromise, the credibility of any decision depended on reaching true consensus.  “Doing otherwise will undermine this Committee to the detriment of all,” he said.


JOSEPH M TORSELLA(United States) lauded the Secretary-General’s steps to rationalize and streamline the budgets for the Committee’s consideration, but those were just a start.  He encouraged him to go further, not just in seeking one-time savings, but towards structural and sustainable efficiencies in peacekeeping and across the United Nations.  He stressed the need to strengthen measures against sexual exploitation and abuse in United Nations peacekeeping.  He noted the steady, continuing progress in implementing the Global Field Support Strategy and stressed the need to stay the course, rather than repeating the deliberations of previous sessions.  There was significant scope for improving the effectiveness of peacekeeping operations; the observations and recommendations of the Board of Auditors provided a starting point for that.


He reaffirmed the United States strong support for United Nations peacekeeping and the global partnership at the heart of it, saying United Nations peacekeeping was burden-sharing at its best.  But over the course of the past few Committee sessions, that global partnership had been under increasing strain.  He particularly hoped to avoid last year’s experience of prolonging the second part of the resumed session into 1 July, which had put all peacekeeping operations, and by extension, the Organization’s credibility, in jeopardy.


He strongly affirmed the principle of consensus-based decision-making and remained deeply concerned by the outcome in March of the first part of the resumed session, during which an “L” document had been submitted before consensus had been reached on the resolution on accountability.  “Forcing a decision on administrative and budgetary matters on a basis other than consensus will not be a victory for any group, but rather a defeat for the global partnership, with repercussions for the entire Organization,” he said.  If peacekeeping budgets were jeopardized by the Committee’s inability to achieve consensus, vulnerable populations in the affected countries would be put at risk.  The United States was committed to engaging partners cordially and collegially to reach decisions by consensus on all agenda items, but it would not participate in a negotiating process incompatible with the principle of consensus-decision making.  Through constructive dialogue and open-mindedness, the Committee would be able to achieve a positive outcome.


AKIHIRO OKOCHI (Japan) said his country was of the view that Member States should be prepared to provide adequate capacity and resources to peacekeeping operations for the successful implementation of their mandates.  At the same time, the need for efficient, effective and accountable management of those operations could not be overemphasized, not only due to the current difficult financial situations of Member States, including Japan, but more essentially because experience showed that redundant resources without adequate management often hindered effective operations and the Organization’s long-term sustainability.


On an anticipated 5.5 per cent decrease in the overall budget for this year, he said “apparently this figure reflects the end of the surge in peacekeeping operations, which characterized the last decade”.  The levelling-off of peacekeeping operations was demonstrated by many factors, including, among others, an overall decrease in the approved troop levels.  Without being complacent about that reduction of the budget proposal, Japan was ready to work towards an agreed budget level that would neither exceed nor fall short of what each peacekeeping mission required.  The budget proposal contained an increase in civilian personnel costs by 4 per cent, while military and police personnel costs as well as operational costs were reduced by 7 per cent and 10 per cent, respectively. 


Japan was of the view that posts and positions, especially of the support account, should be carefully reviewed in order to avoid over-posting, he said, reiterating that the posts and positions kept vacant for a certain period of time were demonstrably either inessential or unnecessary.  The concrete outcomes of the first two years of implementation of the Global Field Support Strategy should be examined before entering the remaining three years of the initiative.


FELIX AYIBANUAH DATUOWEI (Nigeria), aligning himself with the Group of 77 and China’s statement, stressed the need for adequate funding for peacekeeping operations.  The impact of inadequate resources, particularly on strife-ridden regions in Africa, was felt in the outcomes of peacekeeping operations.  It was unlikely that the Senior Advisory Group on reimbursement rates would complete its work during the Committee’s current session.  Unless another pragmatic approach was adopted in the interim to provide, on an exceptional basis, a one-time supplemental payment of $85 million from 1 July 2012 to 30 June 2013, without prejudice to the Senior Advisory Group’s likely recommendations, troop-contributing countries would be subjected to further hardship, and implementation of United Nations mandates could suffer reverses.


He welcomed the Secretary-General’s identification of cross-cutting targets for resource reductions in response to Assembly resolution 65/289, with a view to achieving economies of scale within and between field missions.  He lauded the Secretariat’s move to take into account the particular circumstances of each peacekeeping operation during budget preparations.  He encouraged the Secretariat to furnish sufficient information on how those measures would be applied to each mission, including any mitigation measures to ensure that no mandate implementation was affected.


He lauded the Secretariat’s positive developments in human resource management reform to address perennial problems in peacekeeping, including the difficulty in recruiting and retaining staff.  He looked forward to further analytical reports on the impact of implementing those reforms.  He expressed concern over the prolonged delay in implementing electronic management systems to manage fuel, air operations information, and rations, and he urged the Secretary-General to bolster efforts to achieve positive outcomes without incurring extra costs.  He expressed the same concern over the required interface between those systems and UMOJA.  He called for more detail on the air transportation governance framework in the Secretary-General’s next overview report.  That framework should clearly define the lines of authority and accountability.


He noted the Department of Field Support’s steps towards implementation of the International Public Sector Accounting Standards (IPSAS) aimed at strengthening accountability in peacekeeping operations.  He agreed with the Advisory Committee’s view that while the senior managers’ compact could develop into a powerful accountability measuring tool, it had yet to make any appreciable change.  Such managerial accountability tools should be developed for the whole Organization.  He also endorsed the Advisory Committee’s recommendation that accurate, complete and transparent reporting should be presented to the Assembly annually.


Financial Reports and Audited Financial Statements, Reports of the Board of Auditors


LIU YU, Chair of the Audit Operations Committee and Director of External Audit of China, introduced the financial report and audited financial statements for the 12-month period from 1 July 2010 to 30 June 2011 and the Report of the Board of Auditors, Volume II: United Nations peacekeeping operations (document A/66/5/Vol.II), highlighting what he deemed to be “four of the more important findings”.


First, the Board of Auditors had found a potential overestimation of $68.43 million in the 2010/11 budget.  The Board had indentified a number of areas requiring improvement, including the need for further refinement of budget assumptions and ensuring their consistent application with due regard to individual missions’ mandates and requirements; improved computation methods; and more thorough managerial and Headquarters review of cost estimates to avoid errors and omissions.  Those deficiencies had resulted in the potential overestimation.


Second, the Board had found some 23,243 assets with a combined value of $136.56 million in 14 missions, which had remained in stock for more than a year and had not been used as of the end of the 2010/11 financial year.  He described 3,247 assets totalling $13.74 million as in “bad condition”, “write-off” or “pending write-off” and, therefore, at risk of being wasted.


Third, the Board had indentified weakness in managing “self-constructed” projects, he said.  On the mission subsistence allowance accommodation in UNAMID, which was a $90 million project vital to its successful delivery, the mission had reduced significantly the accommodation capacity of the project from 1,946 to 1,526 persons and built an additional unplanned cluster for the Joint Special Representative at a considerably higher standard and cost compared to that of the staff.  The Mission had not reported to Headquarters the changes nor sought their prior approval, and Headquarters was not closely monitoring the project’s progress.


Fourth, he said, owing to a lack of clear targeted benefits and benchmarks, the Board could not objectively assess implementation of the restructuring of the Department of Peacekeeping Operations.  A similar weakness was found in the context of the Global Field Support Strategy.


MARÍA EUGENIA CASAR, Assistant Secretary-General and United Nations Controller, introduced the report of the Secretary-General on the implementation of the recommendations of the Board of Auditors concerning United Nations peacekeeping operations for the financial period ended 30 June 2011 (document A/66/693).  The report took into account, among others, a request to provide a full explanation for the delays in implementing the recommendations of the Board from prior periods.


She recalled that the Board had previously expressed an opinion on the financial statements relating to peacekeeping operations, and in earlier years had included “emphasis of matter” or “other matter” paragraphs, drawing attention to the weakness in the management of assets.  In the present report, the Board’s audit opinion on the financial statements did not include any such “emphasis of matter” or “other matter” paragraphs.  But the Board had explicitly recognized that improvements had continued to be made in 2010/11, and that programmes were under way to address the issues related to the management of assets, specifically in the context of the implementation of IPSAS.


Some areas, such as the physical verification of assets and the reactions of un-liquidated obligations, were showing a trend of continuous improvement, she said, demonstrating the efforts made by the Administration to address the Board’s concerns in the previous reports. “At the same time, we are acutely aware that the implementation of IPSAS will raise the bar again and, therefore, we have to continue to aggressively address the control aspects in these areas,” she said.


With regard to implementation of 52 recommendations from the 2009/10 period, 44 per cent had been fully implemented, and 56 per cent had been partially implemented, she stated.  The Board had noted improved monitoring of the implementation of its recommendations and of its guidance to the missions.  The Secretary-General, in the report, noted the specific concerns expressed by the General Assembly resolution 65/243 B about non-expendable and expandable property; un-liquidated obligations; the identification of root causes of recurring recommendations; and accountability of managers for implementation of recommendations.  The current status on action on those items was summarized in part II of his report.


COLLEN KELAPILE, Chair of ACABQ, introduced its related report (document A/66/719).  While stressing the importance of implementing all recommendations of the Board of Auditors in a timely manner, he said that highest priority should be given to addressing deficiencies, which were found to be systemic in nature.  The Board played an important role in identifying such systemic issues in peacekeeping operations.


He said that to effectively tackle those problems, however, their root causes must be addressed.  In that regard, the Committee noted that the Secretary-General highlighted a number of factors in his report on the implementation of the recommendations of the Board of Auditors, including high vacancy rates and obsolete systems, which he felt were the root cause of most of the recurring audit recommendations.  The Advisory Committee, however, was of the view that those issues were within the purview of the Administration to address.  Furthermore, the Committee considered that the deficiencies noted by the Board must also be seen, at least in part, as reflective of managerial weakness and shortcomings in internal controls and oversight.  The Advisory Committee reiterated its view that taking appropriate action to address such weakness was integral to an effective accountability framework.


Mr. BENMEHIDI (Algeria), taking the floor again on behalf of the Group of 77 and China, commended the continued high quality of the Board of Auditor’s report and its efforts to ensure the fair presentation and full disclosure of financial statements of peacekeeping operations.  He noted the information provided by the Secretary-General on implementing the Board’s recommendations.   He was encouraged by improvements to the financial and administrative management of peacekeeping operations and hoped that the Secretariat would draw on successful experiences and lessons learned — with particular attention to systemic shortcomings and recurring, interrelated problems like the low rate of implementing the Board’s recommendations and the deficiencies in peacekeeping management and administration, in order to sustain the positive trend.


He stressed the need for full, efficient and timely implementation of the Board’s recommendations.  He shared the Advisory Committee’s concern over the level of financial risk to which the Organization was exposed due to the managerial weaknesses noted by the Board.  He called on the Secretariat to take practical measures to set the time frame and priorities for implementing the Board’s recommendations and hold the office-holders to account.  Moreover, it was more crucial than ever for the Secretariat to reinforce dialogue with the Board to identify the root causes of recurring issues and to prevent the delay in implementing its recommendations, he said, expressing concern that the implementation rate was still less than 50 per cent.


Concerned also at the extent of cancellation of prior-period obligations and the continued high level of obligations raised during the last month of the financial period, he reiterated the Assembly’s request to the Secretary-General to adhere to the criteria for creating and cancelling obligations.  Regarding implementation of IPSAS in peacekeeping operations by the 1 July 2013 target date, he noted with concern the Board’s findings.  He asked the Secretariat for further information on the absence of both dedicated resources and a detailed plan for IPSAS implementation for each operation and in peacekeeping as a whole.  He was also concerned over recurrent weaknesses and deficiencies in procurement and contract management, as observed by the Board.  He called for strict adherence to the Procurement Manual and other procurement rules and procedures, and noted the importance of effective monitoring and oversight of field procurement by Headquarters to ensure such compliance.


DAE-JONG YOO (Republic of Korea), noting the presentation in the Secretary-General’s report of the root causes of most recurring audit recommendations, said those issues, such as the high vacancy rate and outdated systems, could be fully addressed only through the introduction of suitable measures implemented over a longer period.  ACABQ pointed to the managerial weakness and shortcomings in internal controls and oversight, but said those were within the purview of the Administration to address.  His country sought the Secretariat’s comment on that observation and felt that the Secretariat should take a more proactive approach to the recurring problems.  Also, the Secretariat should give high priority to implementation of the Board’s recommendations, particularly the four to which the Board attached particular importance. 


Citing a possible budget overestimation of about $68.4 million, he said his delegation sought the Secretariat’s comments on how to get rid of or substantially reduce that overbudgeting trend.  On mission exit and liquidation, missions often saw their mandates terminated on short notice, as had been the case with MINURCAT and UNMIS.  He wanted to hear from the Secretariat about lessons learned from those cases and plans to incorporate those into formulating future liquidation plans.


The Board of Auditors, he recalled, had noted that, with respect to restructuring the Department of Peacekeeping Operations, there had been an overreliance on qualitative indicators of achievement and a lack of baselines for quantitative results, without which it was difficult to measure the results of the initiatives.  The Secretariat cautioned against the use of one model to assess the impact of reforms.  He favoured the Board’s recommendation to apply the lessons learned to future business transformation and change management activities, with a view to monitoring the realization of the planned benefits of such initiatives.  The recommendation should be shared among all Departments in the Secretariat, so they could come up with clear goals and, to the extent possible, clear benchmarks and baselines at the early stage, when planning the same exercise.


OLIVIO FERMÍN (Dominican Republic) asked the Secretariat to clarify, during the Committee’s informal session, the functions of the MINUSTAH Support Office in Santo Domingo.  He believed that Office had a specific function to provide administrative and logistical support, but it was not a centre in itself.


Responding to the delegates’ statements, Ms. CASAR, United Nations Controller, said the focus during the session must be on the underlying causes for the audit recommendations.  The Controller’s Office was trying to manage the issues.  During implementation of IPSAS, almost all of the resources of the Controller’s Office were focused on that project.


Administrative and Budgetary Aspects of Financing of United Nations Peacekeeping Operations


Continuing, Ms. CASAR introduced the Secretary-General’s report on the updated financial position of closed peacekeeping missions as of 30 June 2011 (document A/66/665), noting that the cash available for return to Member States as of that date had decreased to $27.6 million, due in part to the loans given to active peacekeeping operations, which had increased from $12 million on 30 June 2010 to $41.5 million.  Cash surpluses of closed missions remained the only source for alleviating the cash shortages for active peacekeeping operations.  Cumulative cross-borrowing during 2011/12 had reached $109 million for six active missions, compared to $88.9 million for four active missions during 2010/11.


She said that the Secretary-General proposed that the General Assembly approve the retention of the net cash balance of $27.6 million available in 18 closed missions as of 30 June 2011.  That amount, combined with the $41.5 million borrowed by active missions as of 30 June 2011, could provide $69.1 million of cross-borrowing capacity to manage cash shortfalls in active peacekeeping operations.  On the outstanding dues, the appropriate resolution would be for Member States that were in arrears in their payments to closed peacekeeping missions to pay those contributions expeditiously, as called for in resolution 65/293.  Two alternatives proposed in the Secretary-General’s report, she said, involved utilizing a part of the unencumbered balance in the special account for UNAMID to settle the $63.1 million owed to troop- and police-contributing countries.   


Mr. KELAPILE, Chair of ACABQ, introducing the updated financial position of closed peacekeeping missions as of 30 June 2011 (document A/66/713 and Corr.1), noted that as of that date, 18 of 23 closed peacekeeping missions had a total of about $27.6 million in cash surpluses available for credit to Member States, and five missions had a combined $86.8 million in cash deficits.  ACABQ noted with concern the increase in borrowing from the accounts of closed peacekeeping missions with cash surpluses in order to meet cash flow requirements of active peacekeeping missions with cash deficits, mainly because of the unpredictability in the receipt of assessed contributions.  The Advisory Committee felt that the cash flow requirements of active missions should be delinked from the cash surpluses of closed missions that should be returned to Member States.


Such proposals, he said, would only be a temporary remedy, which would not address the root causes of the problem and would entail utilizing resources due to Member States that had paid their assessed contributions in full to meet the financial obligations to the Organization of those that had not.  The Committee recommended that the Assembly request the Secretary-General to submit concrete proposals, both to address the issue of outstanding dues from closed peacekeeping missions that were in net cash deficit and for a long-term solution to the cash shortfalls for active missions that currently could only be met by borrowing from closed peacekeeping missions.  The Committee also considered that some proposals that had been made in the past could be revisited, including the proposal to apply available credits against outstanding contributions.


Mr. BENMEHIDI (Algeria), taking the floor again on behalf of the Group of 77 and China, expressed concern over the cash deficit situation in several closed peacekeeping missions, owing to the non-payment of arrears by some Member States.  He recalled the legal obligation in the Charter of all Member States to pay their assessed contributions in full and on time.  He noted that Assembly resolution 65/293 asked the Secretary-General to submit for its consideration and approval concrete proposals and alternatives to address the issue.   The Group of 77 would carefully study the Secretary-General’s proposal to try to find a lasting solution to the longstanding problem.


OLIVIER MEYRAT (Switzerland), who also spoke on behalf of Liechtenstein, pointed to the three main flaws in the United Nations dysfunctional accounting practices concerning peacekeeping missions.  He reiterated his disapproval of the budgetary practice of retaining surplus cash from closed missions to provide liquidity for active ones.  The disturbing record increase in cross-borrowing illustrated the urgency, as underscored by the Advisory Committee, to find an alternative to the current funding mechanism, which was contrary to the requirements of a sound, transparent financial management system.  He asked the Secretariat to make concrete proposals for a sustainable alternative to the current practice.  He also recognized the urgent need to find a definitive solution concerning the sums owed to troop-contributing countries of closed peacekeeping missions.  He regretted that the Secretary-General had been unable to devise a convincing structural solution.  In that context, he supported the Advisory Committee’s recommendations.  The Secretary-General must redouble his efforts and submit to the Assembly all possible options for solving the problem, including revisiting past proposals. 


Financing of Peacekeeping Operations


Next, Ms. CASAR, United Nations Controller, introduced the Secretary-General’s reports on financing peacekeeping operations, reviewing the budget performance reports for the period from 1 July 2010 to 30 June 2011 for the United Nations Mission in the Central African Republic and Chad (MINURCAT) (document A/66/646), United Nations Mission in the Sudan (UNMIS) (document A/66/608), United Nations Integrated Mission in Timor-Leste (UNMIT) (document A/66/609), United Nations Mission for the Referendum in Western Sahara (MINURSO) (document A/66/573),United Nations Disengagement Observer Force (UNDOF) (document A/66/556) and the United Nations Interim Force in Lebanon (UNIFIL) (document A/66/582).


She reviewed the final performance report for the same period for the United Nations Mission in Ethiopia and Eritrea (UNMEE) (document A/66/560), and the final disposition of assets report for the United Nations Observer Mission in Georgia (UNOMIG) (document A/66/569).


She also introduced the proposed budget reports for the period 1 July 2012 to 30 June 2013 for UNMIT (document A/66/711), MINURSO (document A/66/681), UNDOF (document A/66/683 and Corr.1) and UNIFIL (document A/66/701 and Corr.1).


For UNMIT, she said, the proposed budget amounted to $160.2 million, which represented a reduction of $35.9 million, or 18.3 per cent, compared to the appropriation for 2011/12.  The proposed budget for MINURSO amounted to $58.7 million, exclusive of budgeted contributions in kind, which represented a reduction of $2.7 million or 4.4 per cent compared to the appropriation for 2011/12.  Regarding UNDOF, its proposed budget amounted to $46.2 million, a reduction of $4.3 million, or 8.5 per cent, compared to the appropriation for 2011/12.  Finally, for UNIFIL, the proposed 2012/13 budget amounted to $517.2 million, a reduction of $28.3 million, or 5.2 per cent, compared to the appropriation for 2011/12.


Mr. KELAPILE, Chair of ACABQ, then introduced the related reports of the Advisory Committee on the financing of the eight peacekeeping operations under consideration today.  The reports covered budget performance for the period from 1 July 2010 to 30 June 2011 as well as the Secretary-General’s budgetary proposals for the 2012/13 period.


As for MINURCAT (document A/66/718/Add.2), he noted the Advisory Committee’s concern at the manner in which the recruitment exercise for national staff had been conducted and the resulting budgetary and legal implications.  It was also of the view that sufficient staff should have been retained for the liquidation exercise in order to avoid the increased requirement for staff from other missions to support the exercise.  At the same time, it noted progress in the implementation of activities that were handed over to the Mission’s partners at the termination of its mandate.  The Committee had no objection to the Secretary-General’s proposed course of action.


On UNMEE, he said the Advisory Committee recommended acceptance of the Secretary-General’s proposal to credit the available cash balance of about $9 million to Member States (document A/66/718/Add.3).


Concerning UNOMIG (document A/66/718/Add.1), the Committee noted that its assets with an inventory value of $3.7 million and a residual value of $1.1 million had been transferred to the Office of the United Nations High Commissioner for Refugees (UNHCR) at no cost, because a commercial sale would not have served the interests of the Organization.  The Committee recommended acceptance of the course of action proposed in the Secretary-General’s report.


On UNMIS, the Committee recommended acceptance of the Secretary-General’s proposal that the unencumbered balance of $9.2 million, as well as other income and adjustments in the amount of $29.2 million be credited to Member States (document A/66/718/Add.5). 


The Advisory Committee recommended approval of the Secretary-General’s proposed budget for UNMIT for the period from 1 July 2012 to 30 June 2013, in the amount of $160.2 million (document A/66/718/Add.8).


Concerning the financing of MINURSO, the Advisory Committee’s recommendation would entail a reduction of $476,000 to the 2012/13 proposed budget.  The reduction was related to aviation fuel supply for the Mission’s air fleet (document A/66/718/Add.6).


With respect to UNDOF, the Advisory Committee recommended approval of the Secretary-General’s proposals for 2012/13 with the exception of reductions under the resources for both international and national staff (document A/66/718/Add.10).


For UNIFIL (document A/66/718/Add.4), the Advisory Committee had been informed that the mission’s air fleet had been reduced from seven helicopters to five.  If the fleet remained at five, the result would be reduced requirements for the 2012/13 of $181,700.  On the basis of the information provided, ACABQ recommended approval of the Secretary-General’s proposals for 2012/13, subjected to updated information.  The Committee welcomed continued efforts by the mission to review its staffing and to propose adjustments to meet its changing priority needs.


EMIL STOJANOVSKI (Australia), also speaking on behalf of Canada and New Zealand, strongly supported UNMIT and its vital work in Timor-Leste.  He was fully committed to promoting long-term peace and stability in that country, and he welcomed advances in the political process there as well as ongoing improvements in the security situation as it celebrated its tenth anniversary of independence.  That had been demonstrated most saliently by the smooth and peaceful conduct of the recent presidential elections.  He deeply appreciated the support provided by UNMIT during the election process and the ongoing support it would give to prepare for the parliamentary elections scheduled for 7 July.  UNMIT’s work for the remainder of the year, as its mandate came to an end, would be pivotal in ensuring a smooth transition of responsibility of activities to the Timorese Government.


“It is in all Member States’ interests to ensure that UNMIT is sufficiently resourced to continue its successful implementation of the Joint Transition Plan and the transfer of its responsibilities to key stakeholders,” he said.  That would be vital for the country’s long-term sustainability of peace, security and strong national institutions.  He was particularly encouraged by UNMIT’s efforts to train national staff through the national staff capacity-building project.  Improving the professional abilities and increasing the future employment prospects of hundreds of Timorese staff augured well for the long-term strength of national institutions and peacebuilding efforts, once UNMIT’s mandate ended.  Recognizing the staff vacancy rate of nearly 25 per cent for national officers, he urged UNMIT to bolster efforts to fill vacant posts.  Such a move would be crucial to carry out the remainder of UNMIT’s important mandate. 


JOÃO AUGUSTO COSTA VARGAS (Brazil) commended the Timorese electoral authorities for carrying out the presidential elections in a democratic, peaceful and orderly fashion.  The flawless organization of the second round last month confirmed that Timor-Leste had progressively moved steadily towards solid and lasting stability.  UNMIT had played a significant role in helping the Timorese people develop their institutions and attain the stability that country enjoyed.  Cooperation between the Mission and the Government had been widely cited as a model for post-conflict United Nations missions.  The innovative Joint Transition Plan was an example of that.  Established between the Government and UNMIT, the Plan showed the degree of cohesion and sophistication they had developed in terms of cooperation.  The UNMIT budget reflected the fact that, depending on conditions on the ground and the views of the Timorese Government concerning the United Nations presence, UNMIT would begin its reconfiguration in the second semester.


He said that whatever UNMIT’s format throughout and beyond the reconfiguration period, the United Nations presence in the country must have the necessary resources to continue consolidating progress.  When considering the UNMIT budget, it was important to bear in mind that transition periods presented particular risks to stability.  He expressed concern over the Secretary-General’s proposed cuts in UNMIT’s budget.  In particular, the reduction of resources allocated to some operational areas lacked adequate justification or direct correlation to the situation on the ground.  Instead, they had been made on the basis of arbitrary resource reduction targets.  While it was important to pursue efficiencies in peacekeeping missions, they should be based on the reality on the ground of each mission.  The across-the-board cuts in key resourcing areas proposed by the Secretary-General would directly impact the troops on the ground and their ability to carry out their mandated tasks.  He regretted that that kind of reduction had been proposed in most of the Organization’s peacekeeping budgets.


ISMAIL BASSEL AYZOUKI (Syria) said UNDOF’s establishment and continued presence were due to Israel’s occupation of the Syrian Golan and its defiance of related United Nations resolutions.  Financing of UNDOF should be borne by the “Israeli aggressor”.  Syria had fully respected the disengagement agreement on the basis that that was a temporary situation awaiting resolution.  Syria looked forward to realization of a just and comprehensive peace in the region through implementation of all Assembly resolutions.  He thanked troop-contributing countries to UNDOF.  


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