United Nations Financial Situation ‘Generally Sound and Positive’, Top Management Official Tells Budget Committee

GA/AB/4242
6 October 2017
Seventy-second Session, 5th Meeting (AM)

United Nations Financial Situation ‘Generally Sound and Positive’, Top Management Official Tells Budget Committee

Delegates Approve Draft Resolution Retaining General Assembly Voting Rights for Four Countries in Arrears

The Organization’s financial indicators for 2017 for peacekeeping operations and the tribunals remained generally sound and positive, although the regular budget cash was currently exhausted and reserves were at low levels, the United Nations senior management official told the Fifth Committee (Administrative and Budgetary) today.

Jan Beagle, Under‑Secretary‑General for Management, laid out the Organization’s three main financial categories ‑ the regular budget, peacekeeping operations, international tribunals — for the Fifth Committee delegates.  “Severe cash problems will be experienced in the final months of 2017, unless significant contributions are received,” she said. 

Assessments in 2017 for the regular budget were slightly above the 2016 level, and payments received by 30 September 2017 were slightly below payments in 2016, she said.  She thanked the 134 Member States that had already paid their regular budget contributions by the end of September, and urged the remaining 58 Member States in arrears to pay in full as soon as possible.  “The final outcome will largely depend on incoming contributions in the remaining months of the year,” she said.

Ms. Beagle said cash balances were positive for peacekeeping operations and the tribunals.  Noting that the Secretariat continued to make every effort towards minimizing the level of outstanding payments, she said that only $1 million was owed to Member States for troops and formed police units — which was a record.  Some $404 million was currently owed for contingent‑owned equipment claims, reflecting a significant reduction in amounts owed.  She went on to stress that the Secretary‑General was committed to meeting its obligations to Member States as quickly as possible.

Describing details of the regular budget’s financial difficulties, she said that the cash shortfall tallied $142 million on 30 September 2016.  The shortfall was covered by $150 million from the Working Capital Fund.  Taking into account reserves, including $201 million in the Special Account, that left $209 million available in the Combined General Fund as of the end of September.

The $351 million in reserves in the Working Capital Fund and Special Account was sufficient to cover only six weeks of regular budget operations, she warned, underscoring that the level of the Working Capital Fund would be addressed as part of the Secretary‑General’s management reform proposals.

Recalling that last May, delegates had been told that the regular budget cash position would experience some tightening as the end of the year approached, she underlined that the regular budget experienced cash shortfalls in August and September.

Concerning peacekeeping operations, Ms. Beagle underlined that the changing demand for peacekeeping activities made it hard to predict financial requirements.  Further, peacekeeping operated on a different financial period, from 1 July to 30 June, rather than during the regular budget’s calendar year, and the mission assessments were issued separately for each operation and at different periods throughout the year.  Such factors could make it difficult for Member States to keep fully current with their assessments.

Of the $6.1 billion assessed for peacekeeping operations in 2017, thus far approximately $5.4 billion had been received.  Approximately $2.5 billion remained outstanding for peacekeeping operations as of 30 September 2017, including recent assessments of $419 million for the United Nations Interim Force in Lebanon (UNIFIL) and $46 million for the United Nations Support Office in Somalia (UNSOS) following the extension of their mandates.  The total cash available for peacekeeping as of 30 September 2017 was approximately $3.4 billion, including the Peacekeeping Reserve account.  The largest amount ‑ $3.1 billion — was earmarked for active missions; followed by $174 million for closed missions; and $138 million for the Peacekeeping Reserve Fund.

Concerning the financial conditions of the two international criminal tribunals ‑ the International Tribunal for the Former Yugoslavia and the International Criminal Tribunal for Rwanda — and the International Residual Mechanism for them, she said that their overall financial position remained generally sound.  The tribunal’s cash position was currently positive, and was expected to remain solid through the end of the year.  Unpaid assessments for the tribunals amounted to $49 million, which was $6 million less than the previous year.

At the meeting’s outset, Miroslav Lajčák, President of the General Assembly, gave brief remarks.

Afterwards, delegates unanimously endorsed a draft resolution by which the General Assembly would permit four countries in arrears — the Comoros, Guinea‑Bissau, Sao Tome and Principe, and Somalia — to vote in the 193‑nation body until the end of its seventy‑second session, recognizing that their failures to pay the minimum amount were “due to conditions beyond their control”.

Also during the meeting, William Kennedy, Senior Programme Officer of the United Nations Fund for International Partnerships, introduced the Secretary‑General’s report on the activities of the United Nations Office for Partnerships in 2016.

Bettina Tucci Bartsiotas, Assistant Secretary‑General and Controller, Office of Programme Planning, Budget and Accounts, introduced the Secretary‑General’s Report on the Office of Counter‑Terrorism, as well as a report on the United Nations Institute for Disarmament Research.  Carlos Ruiz Massieu, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced the corresponding ACABQ reports.

Ms. Bartsiotas also introduced a report on conditions of service and compensation for officials serving the General Assembly.

Also speaking today were the representatives of Ecuador (on behalf of the “Group of 77” developing countries and China), and India.

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

Statement by General Assembly President

MIROSLAV LAJČÁK (Slovakia), President of the General Assembly, said the Fifth Committee played a critical role in the United Nations system, particularly as its work involved all three pillars of the Organization’s work.  He noted that the resolutions that were adopted by the Committee were binding for Member States and constituted a commitment of States to share the financial burden for the United Nations activities.  The Committee’s work affected many people; both inside and outside the United Nations building.  Good working methods, timely decision‑making and maintaining a spirit of congeniality would result in a successful session, he said, underlining that the Committee’s agenda was very heavy for this session.

He encouraged delegates to further examine and improve the working practices of the Fifth Committee and hold different parts of the United Nations system accountable when it came to the timely provision of reports.  He acknowledged the challenge posed by the late availability of reports, particularly those with budget implications from the Assembly’s other main committees and in that regard, he reported that he had met with the heads of the other committees and urged them to proceed with their work efficiently.  He went on to point out that the Fifth Committee’s work directly impacted the lives of people, and in that context, he urged delegates to efficiently proceed with their decisions, bearing in mind the need for staff members to prepare for and adjust to any changes.

Scale of Assessments — Requests under Article 19 of the Charter

The Fifth Committee approved without a vote draft resolution A/C.5/72/L.2, by which the General Assembly would decide to permit the Comoros, Guinea‑Bissau, Sao Tome and Principe, and Somalia to vote in the 193‑nation body until the end of its seventy‑second session by acknowledging that their failures to pay the full minimum amount required to avoid the application of Article 19 of the United Nations Charter were “due to conditions beyond their control”.

United Nations Office for Partnerships

WILLIAM KENNEDY, Senior Programme Officer of the United Nations Fund for International Partnerships, introduced the Secretary‑General’s report on the United Nations Office for Partnerships (document A/72/167).  Established in 2006 and comprising primarily the Partnerships Fund and the United Nations Democracy Fund, the Office served as a gateway for public‑private partnerships to advance the implementation of the 2030 Agenda for Sustainable Development.  At the end of 2016, the cumulative grant allocations provided by the United Nations Foundation through the Partnerships Fund for projects implemented by the United Nations System totalled approximately $1.4 billion, with the total number of supported projects standing at 618.  Collectively, those projects had been implemented by 48 entities in 127 countries.

He added that in 2016, the Democracy Fund had funded 49 new projects from its tenth round at a total cost of just over $10 million, before launching its eleventh round of funding in November 2016.  By the end of 2016, the Democracy Fund had supported close to 700 projects in more than 130 countries since its inception.  He added that overseeing the management and operations of the Partnerships Fund and the Democracy Fund remained at the core of the Office’s work, in addition to convening events to increase awareness and mobilize action towards the implementation of the Sustainable Development Goals.

LOURDES PEREIRA SOTOMAYOR (Ecuador), speaking on behalf of the “Group of 77” developing countries and China, welcomed the efforts of the Partnerships Office to serve as a gateway for public‑private partnerships to advance the implementation of the 2030 Agenda.  The Group noted the Office’s valuable contributions on advocacy and communications, its work with institutions on data, its development and humanitarian efforts and education programmes for children in refugee camps as well as its focus on the empowerment of women and the protection of environment.  The Group encouraged the Office to continue engaging with all potential institutions and exploring opportunities for partnerships with the United Nations system.  Further, the Group encouraged the Office to work closely with regional and sub‑regional organizations and support the development efforts of developing countries.

The Committee then adopted a draft decision recommending that the General Assembly take note of the report of the Partnerships Office (A/72/167).

Counter‑Terrorism Office; United Nations Institute for Disarmament Research

BETTINA TUCCI BARTSIOTAS, Assistant Secretary‑General and Controller, Office of Programme Planning, Budget and Accounts, then introduced two reports and one note of the Secretary‑General, the first of which was titled “Revised estimates relating to the Office of Counter‑Terrorism under section 3, Political Affairs, section 29D, Office of Central Support Services, and section 36, Staff assessment” (documents A/72/117 and A/72/7/Add.1).  She recalled that the General Assembly had established the Office of Counter‑Terrorism in line with the recommendations in the Secretary‑General’s report on the United Nations capability to assist Member States in implementing the United Nations Global Terrorism Strategy.  She noted that the present report reflected the transfer of six posts and associated post and non‑post resources of $2 million from the Counter‑Terrorism Implementation Task Force Office in the Department of Political Affairs.  The Secretary‑General had also proposed an additional $1.1 million, net of staff assessment, including $1 million for the Office of Counter‑Terrorism, reflecting the full biennial provision for the two new posts approved by the General Assembly.

Turning to note titled “Request for a subvention to the United Nations Institute for Disarmament Research resulting from the recommendations of the Board of Trustees of the Institute” (documents A/72/369 and A/72/7/Add.2) she said that the Assembly was requested to approve the proposed $2.07 million subvention.  The provision included $1.78 million for funding institutional core staffing of the Institute, or UNIDIR, and $300,000 for an assessment by an independent third party.

On the report titled “Conditions of service and compensation for officials, other than Secretariat officials, serving the General Assembly: full‑time members of the International Civil Service Commission and the Chair of the Advisory Committee on Administrative and Budgetary Questions” (document A/72/366), she noted that the Secretary‑General proposed that the new education grant scheme and the relocation package approved by the General Assembly in its resolution 70/244 be extended to three officials.  She also recalled that in its resolution 65/268, the Assembly decided that the annual net compensation of the three officials should be subject to a cost‑of‑living adjustment equivalent to the annual change in the midpoint net base salary of the Under‑Secretaries‑General and the Assistant Secretaries‑General.

CARLOS RUIZ MASSIEU, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced its report on the revised estimates relating to the Office of Counter‑Terrorism (document A/72/7/Add.1), which recommended that the General Assembly approve the request for an additional $1.1 million, net of staff assessment, and to appropriate the related amounts under the respective budget sections, as proposed.

He then introduced the Advisory Committee’s report on the request for a subvention to the UNDIR for 2018‑2019 (document A/72/7.Add.2), which recommended that the Assembly approve the requested $1.97 million (before recosting) from the 2018‑2019 regular programme budget, reflecting a recommended reduction of $100,000 in the proposed funding for an independent assessment of the Institute.

Ms. PEREIRA (Ecuador), speaking on behalf of the Group of 77 and China, said it supported the proposed subvention for the Institute and looked forward to the independent third‑party assessment that was expected to be carried out in early 2018, to be followed by a report from the Secretary‑General.  The Group also welcomed the Board of Trustee’s call for a sustainable and stable funding structure and operating model that would be consistent with the Institute’s mandate and objectives.

Turning to the conditions of service for full‑time members of the International Civil Service Commission and the Chair of the ACABQ, she said the Group of 77 noted that the Secretary‑General had proposed no change for their compensation and other conditions of service.  However, the Group, during informal consultations, would seek more details on those officials’ cost‑of‑living adjustment.

PAULOMI TRIPATHI (India) hoped that there would be consensus on the proposal for allocating resources to the new Office of Counter‑Terrorism.  At a time when terrorist networks were increasingly using social media and cyberspace for their activities, the menace of terrorism could not overcome if artificial barriers created by political boundaries remained.  There was never a stronger argument for increased cooperation on counter‑terrorism efforts than today, and in that regard, the creation of the Office was a much‑anticipated first step towards better coordination of United Nations counter‑terrorism efforts.  The creation of the post of Under‑Secretary‑General to head the Office was an important step towards achieving that goal, although, the availability of resources to implement the new Office’s mandate remained disproportionately low.  Terrorism was a scourge from which no country was immune, and in that context, States must collectively show political will to ensure action by the United Nations system to combat it.  Going forward, her country would seek an increase in predictable and non‑earmarked resources for the Office for the effective implementation of its mandate.

Improving the Financial Situation of the United Nations

JAN BEAGLE, Under‑Secretary‑General for Management, said that the financial indicators for 2017 for peacekeeping operations and the tribunals remained generally sound and positive, although the regular budget cash was currently exhausted and reserves were at low levels.  “Severe cash problems will be experienced in the final months of 2017, unless significant contributions are received.  This has been the situation experienced in previous years, and we ask all remaining Member States to pay their contributions to the regular budget as soon as possible,” she said, stressing: “The final outcome will largely depend on incoming contributions in the remaining months of the year”.

On the regular budget, she highlighted that assessments in 2017 were slightly above the 2016 level, and that payments received by 30 September 2017 were slightly below payments in 2016.  She noted that 134 Member States had already paid their regular budget contributions in full, and urged the remaining 58 Member States that had not yet paid their assessed contributions to do so as soon as possible.  Cash resources for the regular budget under the General Fund, to which assessed contributions were paid, include the Working Capital Fund at the level of $150 million set by the General Assembly and the Special Account currently at a level of $201 million.  On 30 September 2017, the cash shortfall was $142 million, which was covered by the Working Capital Fund.  Taking into account the reserves, a total of $209 million cash was available on 30 September 2017.

She recalled that last May, delegates had been told that the regular budget cash position would experience some tightening as the end of the year approached.  The regular budget experienced cash shortfalls in August and September, she said, adding that more severe cash problems would arise in the final months unless sufficient contributions were received.  “We will continue to monitor the cash position closely,” she said, noting that the final cash position at the end of 2017 would largely depend on the payments to be made by Member States in the coming months.  The Working Capital Fund and Special Account totalled $351 million, which was sufficient to cover only six weeks of regular budget operations.  Sound financial management required adequate cash reserves so the Organization could meet its financial obligations in a timely fashion, she stressed, underscoring that the level of the Working Capital Fund would be addressed as part of the Secretary‑General reform proposals.

Turning to peacekeeping operations, she underlined that the changing demand for peacekeeping activities made it hard to predict financial requirements.  Further, peacekeeping had a different financial period, assessments were issued separately for each operation and at different periods throughout the year, she said.  A total of $6.1 billion had been assessed for peacekeeping operations in 2017; thus far approximately $5.4 billion had been received.  Approximately $2.5 billion remained outstanding for peacekeeping operations as of 30 September 2017.  That amount included recent assessments of $419 million for the United Nations Interim Force in Lebanon (UNIFIL) and $46 million for the United Nations Support Office in Somalia (UNSOS) following the extension of their mandates.  Due to the unpredictable amount and timing of peacekeeping assessments throughout the year and the differences in fiscal years of Member States, it could be difficult for Member States to keep fully current with assessments, she stated, calling attention to the 34 Member States that had paid all peacekeeping assessments in full.

The total cash available for peacekeeping as of 30 September 2017 was approximately $3.4 billion, including the Peacekeeping Reserve account, she said.  The total included $3.1 billion for the active missions, $174 million for closed missions and $138 million for the Peacekeeping Reserve Fund.  The Secretariat continued to make every effort towards minimizing the level of outstanding payments, and in that regard, she highlighted that only $1 million was owed to Member States for troops and formed police units — which was a record.  Some $404 million was currently owed for contingent‑owned equipment claims, which reflected a significant reduction in amounts owed.  She went on to stress that the Secretary‑General was committed to meeting its obligations to Member States as quickly as possible.

Turning to the two international criminal tribunals ‑ the International Tribunal for the Former Yugoslavia and the International Criminal Tribunal for Rwanda — and the International Residual Mechanism for them, she said that their overall financial position remained generally sound in 2017.  Unpaid assessments for the tribunals amounted to $49 million, which was $6 million less than the previous year.  She said 106 Member States had paid their assessed contributions to the tribunals and the International Residual Mechanism in full, which was five more than in 2016.  The tribunal’s cash position was currently positive, and was expected to remain solid through the end of the year.

She went on to say that the Secretariat continued to improve its processes, including by offering Member States the option of receiving assessment letters via email, adding that so far, 87 Member States had already taken advantage of that option.  In concluding, she emphasized that the financial health of the Organization depended on Member States meeting their financial obligations in full and on time and that a sound cash flow was essential for the Organization to deliver on its mandates.

For information media. Not an official record.