United Nations

GA/AB/3685
12 October 2005

Work of Joint Inspection Unit, Board of Auditors Focus, as Budget Committee Opens Current Session

Proposed 2006-2007 Budget, Financial Implications of 2005 World Summit Outcome among Issues to Be Addressed

(Issued on 11 October 2005.)

NEW YORK, 10 October (UN Headquarters) -- As it began its substantive work for the current session, the Fifth Committee (Administrative and Budgetary) focused on the activities of the Organization's two external oversight bodies -- the Board of Auditors and the Joint Inspection Unit (JIU) -- and the means of increasing their effectiveness.

Stressing the importance to the work of the internal and external oversight bodies of the United Nations, the representative of Jamaica, speaking on behalf of the Group of 77 and China, said it was crucial to ensure that their independence was fully respected.  She also noted the Administration's efforts to assign responsibility to specific office-holders and set time frames for the implementation of recommendations.  She urged the Administration to make every effort to ensure full implementation of the remaining recommendations to the Board.

According to the documents before the Committee, the number of recommendations made by the Board for 15 United Nations organizations has increased in recent years, from 335 recommendations for 2000-2001, to 509 in 2002-2003.  The surge in recommendations in the latest period might explain why 44 recommendations, or 9 per cent, were not implemented at all by 31 May of this year.  Of the 509 recommendations made, 335, or 46 per cent, had been fully implemented by 31 May, and 230, or 45 per cent, still are under implementation.

While welcoming the growing rate of implementation, several other speakers asked for additional assessments on the status of implementation and updates on the cases where the Board's recommendations had not been implemented.  In that connection, the representative of the Republic of Korea said that more emphasis should be placed on such matters as qualitative factors, non-compliance with rules and regulations, impact analysis and follow-up to implementation of the auditors' recommendations.

The representative of the United Kingdom, who spoke on behalf of the European Union and associated States, expressed concern that a number of recommendations consistently occurred in different parts of the Secretariat, indicating a lack of communication.

As for the work of the Joint Inspection Unit, she noted with satisfaction that most of its reports in 2004 were system-wide or inter-agency.  Given the costs, the Union would welcome in the future a more substantive assessment of the impact of Unit's reports, including feedback from client organisations and their executive bodies on the value of the recommendations.  She was concerned about the slow progress in the implementation of the recommendations by participating organisations and was interested in what the Unit was doing to monitor and peruse such cases.

The representative of the Russian Federation was one of a number of speakers who noted with satisfaction recent concrete steps by the Unit and the preliminary results of the reform of the Unit.  Those included measures to improve the Unit's activities, enhance the quality and relevance of its reports, and improve interaction with other oversight bodies.  Those measures had been promoted by the efforts of Member States to strengthen the authority of the Unit, in particular under the terms of resolution 59/267.

Speakers also encouraged the Joint Inspection Unit (JIU), the Board of Auditors (BOA) and the Office of Internal Oversight Services (OIOS) to continue to synergize their efforts to ensure greater coordination and avoid duplication.

Several speakers also expressed concern over the findings of the auditors regarding the financial statements of the Office of the United Nations High Commissioner for Refugees (UNHCR) and such problems as after-service health insurance and post-retirement charges, as noted by the Board of Auditors.  Although the Board had issued an unqualified opinion on the UNHCR's 2004 financial statements, the UNHCR had ended the year under review with a significant shortfall of $58 million over $1.036 billion in expenditures.

Following a discussion on the organization of work for the session at the opening of today's meeting, the Committee adopted its programme of work for the first week of its session, on the understanding that necessary adjustments would be made, as required.

The Administrative and Budgetary Committee is scheduled to consider 35 agenda items during the main part of the session, with the proposed budget for 2006-2007 and the administrative and budgetary implications of the outcome of the high-level session of the General Assembly as a primary focus in its deliberations.  Also on the agenda will be the administration of justice at the United Nations, the financial situation of the Organization, and the Capital Master Plan for modernizing the Headquarters complex, as well as peacekeeping financing and a review of efficiency and the scale of assessments for the regular budget of the United Nations.

Also taking the floor today were representatives of Argentina (on behalf of the Rio Group), Algeria, Japan, Canada (also on behalf of Australia and New Zealand), South Africa, China, Trinidad and Tobago, and Cuba.  The documents before the Committee were introduced by Member of the Board of Auditors and Director of external audit of the Philippines, Sabiniano Cabatuan; Acting Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), Rajat Saha; and Chairman of the Joint Inspection Unit, Ion Gorita.

Background

The Fifth Committee (Administrative and Budgetary) met this morning to begin its substantive work for the sixtieth session, acting on its programme of work and taking up reports of the Board of Auditors and the Joint Inspection Unit.

The first document before the Committee was a Report of the Board of Auditors on the voluntary funds administered by the United Nations High Commissioner for Refugees (document A/60/5/Add.5) for the period from 1 January to 31 December 2004.  Audit activities were undertaken at UNHCR headquarters in Geneva and its offices in Angola, Eritrea, Ethiopia, Namibia, the Russian Federation and New York for the same period.  The auditors found that financial statements presented fairly, in all material aspects, the financial position of the UNHCR for the period under review.

The Board found that, in 2004, UNHCR expenditures increased by 8 per cent to around $1.06 billion and available resources were around $1 billion, leading to a shortfall of $58 million.  At year's end, the reserve and fund balance remained at best stable since 2002 in real terms, at $142.4 million, taking into account inflation and the fall of the United States dollar.

Among the auditors' other findings is the fact that the UNHCR could not obtain confirmation of $4.5 million spent on its behalf by the United Nations Development Programme (UNDP) because of deficiencies in the Atlas system, the new enterprise resource planning system of UNDP.  The amounts in previous-year subprojects covered by audit certificates decreased from 77 per cent in mid-June 2004 to 56 per cent in June this year.

Regarding previous recommendations, the Board reported that UNHCR has agreed with the need to review its project personnel arrangements and issue an instruction to ensure that deployment schemes complied with previous instructions.  The Board had noted that, as of 31 December 2001, UNHCR employed 1,099 project staff members beyond its staffing table of 5,505 posts.  In a September 2001 memorandum (IOM/81/2001-FOM/79/2001) the UNHCR management was instructed to phase out all project staff arrangements by 31 December 2004.  According to that document, the reasons for such action included legal implications and the need to ensure fairness to staff and proper management of human resources.

In response to another recommendation, the United Nations Secretariat and UNHCR agreed to take steps without further delay to provide proper funding for end-of-service and post-retirement benefit liabilities.  Those unfunded liabilities totalled $336 million in 2004, up from $290 million in 2003.

Another document before the Committee contains the Board's report on the implementation of its recommendations relating to the biennium 2002-2003 (document A/60/113).  According to the report, the Board of Auditors, the Joint Inspection Unit, the Office of Internal Oversight Services and internal audit services have increasingly worked together to help implement the Board's recommendations, sharing their experiences, knowledge and best practices.  The Board, in turn, has increasingly incorporated the recommendations of the Joint Inspection Unit and the Office of Internal Oversight Services when compiling its reports.

The number of recommendations made by the Board has increased in recent years to 509 for 2002-2003, up from 335 recommendations for 2000-2001 and 208 for 1998-1999.  The surge in recommendations in the latest period may explain why 44 recommendations, or 9 per cent, were not implemented at all by May 31 of this year.  Of the 509 recommendations made for the 15 United Nations organizations covered in the present report, 335, or 46 per cent, had been fully implemented by May 31, and 230 or 45 per cent, still are under implementation.

One reason for the greater number of recommendations is the decision to break down previously multi-component recommendations into single-issue ones in order to track their progress more easily by computer.  Other factors were the wider audits of information and communications technology.  The Board recognizes that some recommendations may need several years to implement.

At the same time, the Board was pleased to note that the overall percentage of implementation increased to 46 per cent in the 2002-2003 period, up from 34 per cent in 2000-2001. However, the percentage of recommendations not implemented had increased from 7 per cent to 9 per cent during the same period. The Board encouraged organizations which had decreased their level of implementation to intensify their efforts.

The Advisory Committee on Administrative and Budgetary Questions (ACABQ), in a related report (document A/60/387), states that it was informed by the Board that a fluctuating financial situation was "in the nature" of the history of UNHCR and that it is difficult to develop a financial plan for disaster situations.  It was explained to the Advisory Committee that UNHCR has not yet developed an efficient fund-raising network comparable to that of the United Nations Children's Fund (UNICEF), and this might be a reason for continued deficits.

While mindful of the difficulties faced by UNHCR, the ACABQ points out that certain analytical methods, including regression analysis, may be helpful in forecasting future financial needs.  The Board should address the underlying causes of the deficit during its follow-up review and develop concrete recommendations to assist UNHCR in gradually reducing its deficit without affecting its operations.

The Advisory Committee further reiterates its concern regarding the funding of UNHCR's end-of-service and post-retirement benefit liabilities and notes that a number of other entities, including UNCTAD/WTO (United Nations Conference on Trade and Development/World Trade Organization) and UNDP, were also found lacking in that respect.  According to the report, those entities were awaiting the issuance of a report on after-service health insurance benefits, to be used as policy guidance.

On the efforts to phase out project staff, the Advisory Committee commends UNHCR for significant results achieved in this respect and supports the Board in urging UNHCR to continue its work.  [As at 5 September 2003, the number of project staff had been reduced by 87 per cent, to a total of 145 staff in this category.]  However, the ACABQ notes that the Board's report did not include the actual number of project staff as at 31 December 2004.  Upon enquiry, the Advisory Committee was informed that the Board would follow up on the matter during its upcoming audit.

The report also addresses the issue of UNHCR "staff in between assignments".  The Board had made specific recommendations in its previous report concerning the practice of retaining staff members after the expiration of their standard assignment, on special leave with full pay.  At the end of 2002, such staff totalled 113 Professional and 16 General Service.  The ACABQ had requested UNHCR to take urgent action to comply with the recommendations of the Board.  The Advisory Committee looks forward to an update on the situation in a follow-up report.  In that document, the ACABQ also expects to receive further details regarding the Office's procurement activities:  the Board had noted that some field offices did not develop procurement plans, vendor rosters and purchase order logs.  Also, competitive bidding was not always used, because goods and services had to be obtained at short notice during crisis situations.

Turning to the implementation of the Board of Auditors' recommendations, the ACABQ commends the Board for consolidating three separate reports into a single document on the matter.  However, further improvements can be made.  For instance, the Board could indicate specific departmental assignment of responsibility for implementation.  In cases where the Board has felt the need to reiterate a recommendation, a full background (including reasons for delays) should be provided, along with a time frame for implementation.  There should also be a systematic analysis of the impact of the Board's recommendations on the audited entities concerned.

Among the cross-cutting issues addressed in the report is the use of consultants and individual contractors.  In that connection, the Board reiterated its observation that such entities as the Department for General Assembly and Conference Management, the Department of Political Affairs and the Economic Commission for Latin America and the Caribbean do not adhere to administrative instructions in that regard.  The ACABQ agrees that the recommendation regarding the need to adhere to established procedures should be implemented without further delay.  All funds and programmes should ensure that contracts are signed in a timely manner.

Also before the Committee was the report of the Joint Inspection Unit (JIU) for 2004 and programme of work for 2005 (document A/60/34), which have been issued as a single document for the first time "to hand Member States a more comprehensive and dynamic picture" of the Unit's work.

The Joint Inspection Unit is the only independent external oversight body of the United Nations system mandated to conduct evaluations, inspections and investigations across the system.  In 2004, it released 10 reports on issues that ranged from the growing United Nations procurement system to a review of management and administration in the Office of the United Nations High Commissioner for Refugees and efforts to harmonize travel conditions within the United Nations.

Reform has been a critical issue for the Joint Inspection Unit, as Member States in recent years have debated the Unit's merits and its need to streamline its work in order to be more effective.  In resolution 59/267 of 23 December 2004, the Assembly stated its views on several issues, including the selection of inspectors, the responsibilities of the Chairman, the main focus of the Unit's work and the system of follow-up to its reports.  The Unit is now examining the changes that need to be incorporated into its internal working procedures to fully reflect the resolution's provisions.

In its efforts to follow the Assembly's request that the Unit zero in on finding ways to improve management and ensure the best use of available resources, the Unit was expected to issue a number of reports this year.  These reports included "Evaluation of the implementation of results-based budgeting system in peacekeeping operations", which the Assembly has asked the Unit to submit at the sixtieth session.  Other reports include "Oversight lacunae", which would help establish whether there are internal mechanisms in place to review allegations of wrongdoing against officials from the highest echelons of the organization; and "The United Nations system's role in disaster reduction and response".  This would include a look at the work now under way towards creating a regional early warning system, particularly for tsunamis in the Indian Ocean and South-East Asia region.

Organization of Work

Following an introduction of the Committee's programme of work by its Chairman, JOHN WILLIAM ASHE (Antigua and Barbuda), the representative of the United Kingdom, speaking on behalf of the European Union and associated States, said that the priorities of the Committee should be adequately reflected in the programme of work.  It was necessary to assign appropriate time for each issue.  The Committee faced a series of complicated and important negotiations during the main part of the session.  Last month, Heads of State and Government had agreed on an ambitious agenda for change, including in many areas relevant to the work of the Committee.  It was now time for follow-up.  The effective and speedy implementation of the management and Secretariat-reform decisions was a key priority for the European Union.

In the budget year, the European Union believed that priority attention should be given to the agenda items with resource implications where decisions were time-bound, she added.  That applied, of course, to the approval of the next biennial budget, but also to the four peacekeeping budgets on the Committee's agenda.  Regrettably, the lack of timely and complete documentation in all official languages was a serious handicap.  The European Union trusted that the Committee would take the time it needed to consider those budgets.  Furthermore, the Committee should adopt a meaningful decision on the Capital Master Plan.

Noting that the proposed programme of work listed the 9 December as the last day of the session, she added that it was unrealistic, given the likelihood that all programme budget implication statements would be submitted before 1 December.

The representative of Jamaica, speaking on behalf of the Group of 77 and China, also expressed concern about the late issuance of documents.  That had become a perennial problem, which adversely affected preparation and consequently the effectiveness of work of the Committee.  The Group was particularly concerned about the time-bound items, not only from the budgetary aspect, but also with respect to important items deferred from the previous session.  It might be necessary to make adjustments to the time allotted to some items to facilitate the work of the Committee.  She also underlined the crucial role of coordinators in facilitating the work of the Committee.

On the programme of work, she proposed that, at this stage, the Committee should adopt only the first week's programme and that the Bureau should take up the matter of documentation with the Secretariat.  If necessary, responsible departments should give account of the delay in submission.

Speaking on behalf of the Rio Group, the representative of Argentina recalled that the document negotiated at the high-level Assembly session had implications in the field of management.  He hoped that related proposals would be reviewed adequately by the ACABQ and ultimately considered by the Fifth Committee. Other issues of great importance to the Group included the scale of assessments.  The assessments of the Group's members represented a huge burden for their budgets.  They would make efforts, so the Committee on Contributions could have appropriate tools for the methodology to be approved next year, which would provide an adequate response to the problem of abrupt and disproportionate increases in the assessments.

Among other issues of great importance were peacekeeping financing, the regular budget of the Organization, administration of justice, the Capital Master Plan, the OIOS, the United Nations common system and programme planning.  Regarding peacekeeping, he said that missions should have the necessary resources to implement their mandates.  At the same time, budgets and requirements should be duly justified, while improving efficiency.  For that reason, he was concerned that, in some cases, publication of relevant documentation had been unduly delayed.  The Group also maintained special interest in the search for a long-term solution for Haiti.

On the administration of justice, he reaffirmed the necessity to guarantee the independence of the Administrative Tribunal and to reinforce mechanisms that would guarantee transparency, accountability, and the judicial guarantees for the personnel of the organization.  As for the Capital Master Plan, he took note that the Under-Secretary-General for Management had entrusted a study that, without any prejudgement, would evaluate all available options and alternatives for financing.

Algeria's representative said that the delegates would be torn between the traditional task of making decisions on its regular programme of work and on the outcome of the high-level session.  The tardiness of the publication of the documentation was affecting the work of the Committee.  In that connection, he had doubts if the work for the session would be finished on time.

Continuing, he expressed concern that, in the decisions on the budget, development was taking a back seat.  He awaited with interest the proposals in connection with the implementation of the outcome of the high-level session.  On the Capital Master Plan, he expressed hope that a decision would finally be taken on the situation that was costing the Organization money and jeopardizing the health of the staff of the Secretariat.

Syria's representative highlighted the importance of the budget issues in the programme of work, as well as the pattern of conferences and the administration of justice.  He hoped the Committee of Planning and Cooperation (CPC) would be represented at the presentation of the budget.

The representative of Venezuela expressed concern that mechanisms would be established that denied the very principles of the Organization.  Recently, certain countries had been excluded from participation and decisions had been taken without consulting all the delegations.  The results of such work lacked legitimacy, as was the case with the outcome document that came out of recent negotiations.  That outcome had no legal value because of the errors incurred, and he could not take it as a point of reference for negotiations.  However, his delegation would work constructively with other members of the Committee to achieve the best possible results.

The representative of Jordan said that, faced with a busy agenda, the Committee still continued to receive its documents late.  Yet, its members were expected to properly study the reports and provide feedback.  That put a great deal of pressure on the Committee and affected the quality of resolutions adopted as a result.  While he was not a proponent of deferring agenda items, it might make sense to make a decision to defer certain items of non-essential nature.  While accountability continued to be a buzzword, it should be extended to those who were responsible for the issuance of the documentation.

The representative of Japan said the Committee's upcoming session had many complicated items on the agenda, ranging from the peacekeeping mission budgets to the scale of assessments.  He said Japan would cooperate with the coordinators on each item to reach a successful conclusion and would make appropriate comments on upcoming issues.

Introduction of Reports

Speaking on behalf of the Chairman of the United Nations Board of Auditors, SABINIANO CABATUAN, Director of external audit of the Philippines, introduced the Board's reports on the voluntary funds administered by the United Nations High Commissioner for Refugees and the implementation of its recommendations relating to the biennium 2002-2003.  Noting unprecedented oversight challenges at the time of the current session, he emphasized the Board's unwavering commitment to serve the Organization with even higher standards.

In the course of its audits, the Board had "placed high reliance" on the work of the Internal Audit Service provided to the UNHCR by the OIOS.  However, while the UNHCR-OIOS memorandum of understanding provided for 15 auditor posts, only 9.5 full-time equivalent posts were encumbered.  The Board was currently assessing that internal audit service.  It had also liaised with the Inspector General's office and was awaiting the results of its investigation on a case of presumptive fraud uncovered by one of the field teams.

Turning to the UNHCR, he said that, although the Board had issued an unqualified opinion on that body's 2004 financial statements, the financial situation of that body remained a matter of concern, after a year's respite.  The UNHCR had ended the year with a significant shortfall of $58 million over $1.036 billion dollars in expenditures.  The 8 per cent increase in expenditures -- mostly general and supplementary programme funds -- was not matched by appropriate resources, which stagnated.  That would become worrisome, if UNHCR did not reverse the trend.  Non-earmarked, available reserves were at a low level of $74 million.

The issue on unfunded liabilities for end-of-service and post-retirement benefits remained unresolved, he continued.  The amount of $336 million in such accrued but unfunded liabilities was over fourfold the UNHCR's available reserves.  Such a situation should not escape the stakeholders' attention in view of the dependence of UNHCR on voluntary contributions that ebb and flow.

The report summarized the difficulties encountered by UNHCR to obtain accurate financial information from UNDP on expenditures it made on UNHCR's behalf, he said.  This time, the Board had also especially focused on the Department of International Protection.  It had fulfilled its mandate in an appropriate manner, but there was room for improvement in the definition of priorities and in the management of publications, legal advice and training.  The Department might not have addressed as efficiently as it could the gaps in protection:  28 Member States, hosting 6.4 million persons of concern, remained out of the relevant Convention and the Protocol. The Board also noted a risk of inconsistency of protection policy in field offices, due to the lack of clearly defined responsibilities and coordination within the Geneva headquarters when addressing field issues.

As for the response to the Board's findings, he said that it had been immediate: the High Commissioner and his team had undertaken energetically to implement the recommendations.

Turning to the second report, he said that implemented recommendations maintained "a respectable 46 per cent rate" in spite of the fact that the number had more than doubled compared with each of the previous two bienniums.  The rate of those under implementation went down from 58 per cent in the biennium 2000-2001 to 45 per cent in the biennium 2002-2003.  The Board recognized that some recommendations might require considerable time and resources for their full implementation.  Although further improvement could be made, generally steps had been taken to address the need for specification of timetables for implementation of recommendations, the disclosure of office-holders to be held accountable, and the establishment of an effective mechanism to strengthen oversight in regard to the implementation of audit recommendations.

The report also addressed the Assembly's comments in its resolution 59/264 A with regard to the United Nations Office for Project Services (UNOPS), he said.  The Board had previously disclaimed its opinion on that body's financial statements of the biennium 2002-2003. The non-reconciliation of imprest accounts was one of the reasons leading up to such an opinion. The Board noted that while the 2004 imprest account reconciliations had been undertaken, the reconciliations for 2002 and 2003 had not commenced by May 2005. That could have significant impact on the present biennium's opening balances.

Among the Board's other findings was the fact that data cleansing for 2005 had not commenced.  There was, therefore, the risk of inaccurate data.  Also, at the time of the Board's review, there was up to $40.3 million of "budgetary rephasals" in 2004, of which a material amount could not be substantiated using the system's control facility. At the time of the follow-up audit, UNOPS had estimated a deficit of approximately $11.3 million for the 2004 financial year, which would reduce its operational reserve by approximately half.  Development of a proper pricing policy to ensure full cost recovery was in the conceptual stage at the time of the follow-up audit.  UNOPS had not fully addressed, by May 2005, the Board's recommendation with regard to establishing and independently validating an internal control framework following its implementation of the new Enterprise Resource Planning system (ERP).

He added that the Board had noted that UNOPS' inability to fully implement the Board's recommendations was not due to a lack of attention or effort.  It was, rather, on account of the large quantum of actions needed to address deficiencies, while still operating within the existing limited resources and constraints of being a self-financed entity.  The Board would, of course, undertake its final audit on the biennium 2004-2005 in order to express an opinion on UNOPS' financial statements for this period.

Acting Chairman of the ACABQ, RAJAT SAHA, introduced a related report of that body, saying that the major item of concern for the Advisory Committee had been the recurrent deficit with regard to UNHCR.  The ACABQ expected the Board to address the underlying causes of the deficit during its follow-up review and develop concrete management audit recommendations to assist UNHCR in gradually reducing its deficit without negatively affecting its operations.

Most of the ACABQ's report dealt with the Board's reporting on the implementation of its operations, he continued.  Among its suggestions, were a more reader-friendly report structure and a call for a type of formal feedback engaged in by UNICEF, with designation of specific departmental assignment of responsibility for implementation, to be emulated by other audited entities.  What the Advisory Committee emphasized was the need for one comprehensive report on implementation.  Among the cross-cutting issues, he highlighted the Advisory Committee's call for a speedy promulgation and implementation of a formal code of ethics, as discussed in paragraph 24 of the report.

NORMA ELAINE TAYLOR ROBERTS (Jamaica) speaking on behalf of the Group of 77 and China, said she attached great importance to the work of the internal and external oversight bodies of the United Nations.  She believed that it was crucial to ensure the independence of the oversight bodies was fully respected and the Group supported the work of the Board of Auditors.  She welcomed the continued focus by the Board in its audits on performance aspects, which provide Member States with an opportunity to objectively evaluate the performance of the Administration.

She had noted the implementation rate of the recommendations of the Board for the previous bienniums, as set out in document A/60/113, and the Administration's efforts to assign responsibility to specific office-holders and set time frames for the implementation of recommendations.  She urged the administration to make every effort to ensure the full implementation of the remaining recommendations to the Board.

Turning to the report of the Board on the United Nations High Commissioner for Refugees, she noted with concern the dire financial situation faced by UNHCR and urged the full implementation of the recommendations of the Board.  On the topic of the Capital Master Plan, she remained concerned by the escalating costs of the project caused by the delays in its design phase.  She urged the Secretary-General to ensure that the activities of the firms were better coordinated and urged the creation of an Advisory Board.

ELIZABETH GALVEZ (United Kingdom), speaking on behalf of the European Union, said the implementation of the recommendations of the Board of Auditors was a key issue and the Union was encouraged by the number of recommendations that had already been implemented.  She would like the Board of Auditors to include additional assessments on the status of implementation, in particular those recommendations that have not yet been implemented. The Union was concerned that a number of recommendations consistently occurred in different parts of the Secretariat, indicating a lack of communication.

The Union was concerned with many issues and would raise these issues during the session, she said.  The Union was concerned with comments about the negative impact of new and expensive information technology projects across the board.  The Union was also concerned with the underlying financial situation of UNHCR and the wider problems with after-service health insurance and post-retirement charges, as noted by the Board of Auditors.  She supported the Board's recommendation to address the agency's financial problems.  And, she said the lack of improvement at UNOPS was of continued concern, as she emphasized the Union's desire for the rules of recruitment in the Secretariat and agencies to be rigorously implemented.

JOCELYN KINNEAR (Canada), speaking on behalf of Canada, Australia and New Zealand, said she endorsed the assessments contained within the report of the ACABQ with regard to the Board of Auditors' report on the financial statements of UNHCR and its report on the implementation of its recommendations relating to the biennium 2002-2003.

She particularly welcomed the recommendations aimed at improving the UNHCR's management, including through enhanced definition of indicators and the evaluation process to strengthen the effectiveness of the Result-Based Management framework.  She shared ACABQ's concern about the lack of automation of human resources and administration processes in the agency.  She welcomed ACABQ's recommendation that the Board include a systematic analysis of the impact of the Board's recommendations on all audited entities.

On UNICEF, she said she remained committed to the common system of staff salaries and benefits.  Finally, she said it was the season to strengthen oversight, and the Secretary-General and executive heads of funds and programmes had been asked to examine governance structures, principles and accountability.

KAREN LOCK (South Africa) noted that the number of recommendations made by the Board of Auditors had nearly doubled over the past three bienniums and that the implementation rate of the Administration had also increased.  She urged the Secretariat and audited entities to actively pursue their timely implementation, in particular those recommendations that have not been implemented.

She said the implementation report of the Board contained a review of the actions undertaken by the UNOPS to address the critical issues that the Board had raised in its previous audits, and the concerns expressed by the fifty-ninth General Assembly.  She recognized that UNOPS had made considerable effort to address the concerns, but might require more time and additional resources to fully implement the recommendations of the Board.

She remained concerned with the precarious financial situation of the United Nations High Commission for Refugees and its heavy dependence on voluntary contributions for activities regarded as core to the organization.  She said the General Assembly should increase the share of its regular budget contribution to the programme, as it has recently decided to do in another important area.  She urged UNHCR to ensure the full implementation of the recommendations of the Board.

WANG XINXIA (China) noted that the number of the recommendations of the Board had increased to 509 in 2002-2003.  Of the 509 recommendations made for the 15 United Nations organizations covered in the report, 335, or 46 per cent, had been fully implemented by 31 May, and 230, or 45 per cent, were still under implementation.  Her delegation was very concerned about that situation, as the recommendations of the Board were of great significance for improving efficiency and rectifying non-incompliance with rules and regulations.  Relevant departments should accord great importance to their implementation.  She wanted to know more about the cases of non-implementation and expected to receive updates in that regard in the Board's next report.

As for the audit of the UNHCR, she expressed concern over the failure of the Office to phase out all project staff arrangements.  The 2004 report did not include the specific number of project staff, and she wanted to receive the latest information in that regard.  Also of concern was the issue of staff "in-between assignments" -- a total of 129 in that category as of December 2002.  That showed that there were big loopholes in personnel management at the UNHCR.  The Board's recommendations in that regard should be implemented immediately.

Regarding the code of ethics in procurement, she said that it was a priority concern for many States.  Despite promises, the document had still not been finalized. She expected relevant departments to speed up the preparation of the document at an early date. 

YOO DAE-JONG (Republic of Korea) said that he attached great importance to oversight and took note with appreciation of the increased number of the Board's recommendations and the growing implementation rate, although there had been fluctuations from organization to organization.  Continuing in that direction, more emphasis should be placed on such matters as qualitative factors, non-compliance with rules and regulations, impact analysis and follow-up to implementation of the auditors' recommendations.

Turning to this year's report on the implementation of recommendations, he welcomed the fact that the document had been consolidated this year.  He also agreed with the ACABQ that even more transparency and impact were needed.  As the Advisory Committee had correctly pointed out, it was important to introduce further measures, such as setting time frames for implementation, analysing the impact of the Board's recommendations and indicating reasons for delays.  United Nations entities under the Board of Auditors' scrutiny should respond positively to the examples of UNHCR and UNICEF for issuing official reports, responding to audit findings and specifying the officers responsible, which greatly accelerated implementation of recommendations.

In conclusion, he expressed surprise regarding the lack of fraud detection and prevention measures in place in a number of organizations, such as the United Nations Institute for Training and Research (UNITAR), UNOPS and the United Nations Population Fund (UNFPA).  He requested urgent and meaningful action from executive heads of related bodies and expected to be briefed as soon as possible.

Introducing the report of the Joint Inspection Unit, ION GORITA, Chairman of the Unit, said the report showed that 2004 had been a critical year for its reform, as encouraging developments took place in the reform process and other important areas.  These developments included increased interest for the Unit and support among Member States for its actions to improve its methods of work and the relevance of its report, and better and more frequent interaction with Member States.

During 2004, the Unit issued 10 reports, 8 of which were system-wide, a note, and a confidential letter, issued at the request of the executive head of a participating agency.  The Unit used its unique position and cumulative experience of agency operations, strategic perspective and knowledge of best practices and benchmarking, to provide evaluation and oversight, as well as management advice across the whole system.  He said the same approach was used in the preparation of the programme of work for this year and attention was given to identifying themes high on the agenda of Member States and the participating organizations.  He said he hoped that the report on oversight lacunae would contribute to the Committee's future debate on United Nations management reform.

He said, in 2004, the Unit continued its efforts to improve the participating agencies' handling of JIU reports, particularly the implementation of its recommendations.  He said the new and simplified follow-up reporting system was beginning to bear fruit and the unit was encouraged by the implementation rate of its recommendations.  The agency was now aggregating the information into tables that it would share with Member States next year.  The Unit also tried to quantify its recommendations, so their impact could be measured in terms of cost savings, efficiency gains or improved processes.

Ms. GALVEZ (United Kingdom), whom spoke on behalf of the European Union and associated States, noted with satisfaction that most of the Joint Inspection Unit (JIU) reports in 2004 were system-wide or inter-agency, and she would be interested in a proper assessment of the impact of these reports.

Given the costs, the Union would welcome in the future a more substantive assessment of the impact of Joint Inspection Unit reports, including feedback from client organisations and their executive bodies on the value of the recommendations.  She was concerned about the slow progress in the implementation of the recommendations by participating organisations and was interested in what the Unit was doing to monitor and peruse such cases.

Turning to the programme of work for 2005, the Union questioned the value of discussing the topic during the last quarter of the year and wondered if there was scope for an earlier discussion of future work.  The Union would welcome an indication of ideas for the 2006 work programme.  And after the Summit, she would like to hear more about the study under way on the lacunae of oversight, such as what it consists of and precisely which bodies are to be evaluated.  Also, the Union had doubts about the proposed study of implementing 10-year old recommendations on peacekeeping, since the nature and size of the mission had changed so much, and she looked forward to additional reports on host country agreements and on the United Nations system staff medical coverage.

Ms. TAYLOR ROBERTS (Jamaica), speaking on behalf of the Group of 77 and China, said she had always attached importance to the Joint Inspection Unit as an independent external oversight body of the United Nations.  She welcomed the Unit's annual report for 2004 and the presentation of its work programme for 2005 in a single consolidated document, noting that they had been prepared taking into account the provisions of Assembly resolution 59/267.

She supported the commendable progress made by the Unit in improving the quality, relevance and usefulness of its reports, she continued.  That was evident in several of the Unit's reports this year, but more so in the series of reports on results-based management, which set clear benchmarks for measuring progress towards effective implementation of that methodology.  Those reports had been well received by the participating agencies, as well as the Committee on Programme and Coordination.  Consistent with the provisions of resolution 59/267, she also welcomed the inclusion of information on implementation and results achieved by the Organization in the follow-up to the JIU recommendations as endorsed by legislative bodies.  She endorsed the Unit's approach to not only seek to ensure follow-up to its recommendations, but, more importantly, to measure the impact on the participating organizations.

She also wanted to encourage the Joint Inspection Unit, the Board of Auditors and the OIOS to continue to synergize their efforts to ensure greater collaboration and coordination, sharing of information and avoidance of duplication and overlap.  Finally, she had noted with concern the administrative issues highlighted by the Unit in relation to the matter of obtaining visas for official travel of some of its members.  She, therefore, called on all host countries to facilitate the processing of visas to ensure that inspectors and members of staff of the Secretariat were not hampered in the discharge of their responsibilities.

Turning to the Unit's work programme for 2005, she said that the programme was both relevant and useful and welcomed the choice of topics.  They were consistent with the provisions of resolution 59/267, in particular identifying means to improve management, promoting a system-wide approach and developing management criteria and the principle of accountability.  The topics chosen not only reflected an analysis of the commonalities in the agenda of legislative bodies, but also incorporated the Unit's own management assessments, as well as proposals emanating from the Assembly and the secretariats of participating organizations.

VLADIMIR A. IOSIFOV (Russian Federation) said that one of the priority items on the agenda was the issue of strengthening and improving oversight functions within the United Nations.  Due to its unique position as the only independent external oversight body, the Joint Inspection Unit occupied a special place in the system.  He noted with satisfaction recent concrete steps by the Unit, which were reflected in the report before the Committee.  Those included measures to improve the Unit's activities, enhance the quality and relevance of its reports, and improve interaction with other oversight bodies.  Those measures had been promoted by the efforts by Member States to strengthen the authority of the Joint Inspection Unit, in particular under the terms of resolution 59/267.  He believed that the potential of the Unit, as reflected in its statute, had not yet been exhausted, and expected greater use of that untapped potential.

RAJIV RAMLAL (Trinidad and Tobago) said the Committee was confronted with a heavy agenda and was faced with the perennial problem of late documents.  He stressed the Committee's ability to get the job completed.  Also, he recognized the Joint Inspection Unit's efforts to incorporate innovative methods in order to improve its recommendations, as well as the work it had completed to improve the quality of its reports while using limited resources.

He said the Unit's review of management and administration at the World Intellectual Property Organization (WIPO), for example, was well received, because the Unit clearly demonstrated it could serve as an independent oversight body and complete performance-type audits, while it also followed the principals of result-based management.  He urged the Unit to keep replicating the improved quality of its reports, which would help implement the reforms urged by the General Assembly last year.  He added that the Member States must ensure that the Unit has well-qualified inspectors.

On the issue of oversight, he said the synergies among the oversight bodies were still weak and coordination should be strengthened to insure the resources of each body were used more efficiently.  He was pleased to see the preliminary results of the reform of the Unit.  But, he added that self-evaluation should continue and effective oversight was in the best interests of all Member States.

YOO DAE-JONG (Republic of Korea), said he appreciated the report on the Joint Inspection Unit's work, as well as the improvement in its work and the progress it had made on reform.  He agreed with the United Kingdom representative, speaking for the European Union, that discussion on the programme of work for the current year should begin during the latter portion of the previous year, or the beginning of the present year.

He said that in 2002-2003, the Unit issued 19 reports and 10 of them were positively considered.  He urged the Unit to continue measuring the success of the implementation of its recommendations.  He urged the Unit to have the same level of detailed information in its reports that was included in other oversight bodies, for example, the Board of Auditors.  He also urged additional coordination among the oversight bodies, as the bodies have the common objective of effectively managing the resources of the Organization.  Turning to the work program for 2005, he said oversight lacunae were linked with oversight of management reform issues and he urged the chairman of the Joint Inspection Unit to share more information on the report on oversight lacunae with the Member States.

PABLO BERTI OLIVA (Cuba) stressed the good work of the Unit and the positive impact of the process of reforms undertaken so far.  However, that process had still not come to an end.  He also commended the Unit for the advanced stage of the implementation of its recommendations.  He also supported the continuing dialogue between internal and external oversight bodies at the United Nations.  As correctly pointed out in paragraph 27 of the Unit's report, there was a growing awareness that, while the mandates and functions of those bodies were clearly distinct and complementary, they shared the common objective of ensuring the most effective and efficient use of the resources of the Organization.  He encouraged the Unit to continue that kind of dialogue with other bodies of the United Nations.

He firmly rejected the difficulties and delays experienced by the members of the Unit in obtaining visas for official visits, he continued.  Those ran counter to the efforts to step up the investigative work of the Unit.  It was regrettable that some host countries placed such obstacles in the way of the Unit's work.  He encouraged host countries to provide timely processing of visas to ensure that inspectors had speedy access to all offices of participating organizations.  His delegation thanked the Unit for its programme of work for 2005 and was looking forward to examining some of its reports, particularly those relating to the shortcomings in the area of inspection.

Mr. GORITA thanked all delegations for encouraging statements about the progress the Unit had made in its work, as well as criticism about some shortcomings.  He would be happy to provide additional information in informal consultations.

Ms. TAYLOR ROBERTS (Jamaica) asked what conclusion had been reached on her proposal that, in light of the delays of documentation, only the first week's programme of work should be adopted and that the Bureau should conduct consultations with the Secretariat to have a good understanding on the issue of documentation.

The CHAIRMAN answered that the Committee, indeed, had adopted the programme of work for this week.  Of course, the members of the Bureau were interacting with various departments on documentation.  A mechanism had been set with the Acting Chair of the ACABQ on that issue.  Any adjustments to the programme of work would be posted on the website.

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