United Nations

GA/AB/3734
23 May 2006

Fifth Committee Takes up $4.8 Billion Peacekeeping Budget, as It Opens Second Resumed Session

NEW YORK, 22 May (UN Headquarters) -- As it opened its second resumed session today, the Fifth Committee (Administrative and Budgetary) took up a $4.8 billion peacekeeping budget proposal and a series of reports relating to peacekeeping management and oversight.

Introducing the peacekeeping budget, the United Nations Controller, Warren Sach, emphasized the increased scope, dynamic nature and volatility of peacekeeping activities, which had continued to challenge the Organization's ability to deploy and manage 15 peacekeeping operations and 16 political and peace-building missions in the past 12 months.

Based on the mandates of the missions that were established in the past three fiscal years, including those in Haiti, Liberia, Burundi, Côte d'Ivoire and the Sudan, as well as the expansion of the United Nations Organization Mission in the Democratic Republic of the Congo (MONUC), the range of peacekeeping activities has broadened in scope, dimension and complexity resulting in a commensurate growth in the overall peacekeeping budget level.

Mr. Sach clarified that the $256.4-million decrease in the budget for 2006/2007 reflected the closures of the United Nations Mission of Support in East Timor (UNMISET) in May 2005 and the United Nations Mission in Sierra Leone (UNAMSIL) in December 2005, continued downsizing of the United Nations Interim Administration Mission in Kosovo (UNMIK) and reduced requirements for several active missions.  Only the interim financing for the United Nations Operation in Burundi (ONUB) had been presented, pending the Security Council's decision on its proposed withdrawal from Burundi by 31 December this year.

Several delegations expressed their views on the budget proposal, with the representative of Japan pointing out that efficiency of the management process should be reviewed before additional resources were requested.  His delegation attached importance to more realistic budgeting based on realistic assessment of requirements, as well as the opportunity for gains in efficiency and savings.  It was most regrettable that the Secretary-General was not yet in a position to present his view on the management structure of peacekeeping operations.  And he was not convinced that proposed new initiatives would lead to improvements unless management structure was analysed clearly and comprehensively.

The Budget Committee traditionally devotes its late spring session to various aspects of financing of United Nations peacekeeping, ranging from individual mission budgets to procurement and procedures for determining Member States' reimbursement for contingent-owned equipment.  The financial year of peacekeeping operations runs from 1 July to 30 June, and their costs are assessed among Member States on the basis of a special peacekeeping scale.

As the Committee approved its provisional programme of work for the session, several speakers commented on its heavy workload, with some 150 reports to be considered in the coming weeks.  The Committee's traditional workload has also been increased by the need to discuss forthcoming reports on the reform of the United Nations, which had been requested by the General Assembly in April.

Commenting on the numerous reports of main overview bodies, including the Board of Auditors and the Office of Internal Oversight Services (OIOS), several speakers expressed concern over the increase in the number of reports of fraud and presumptive fraud, stressing the need to properly investigate all such cases and hold those responsible accountable.  While generally in favour of regional cooperation among field operations as a means of achieving savings, several speakers also supported the Board of Auditors' recommendation that the concept of integrated mission partnerships should be formalized and further developed.

Also emphasized in the debate was the need to establish effective procurement policies, with the representative of Austria (on behalf of the European Union) stressing the need to put in place comprehensive rules and regulations, better internal controls, effective vendor review and performance bonds, a cadre of trained and professional staff and a comprehensive and up-to-date information technology system to ensure a cohesive procurement process.  Brazil's representative said he expected to see concrete and affirmative measures to increase procurement opportunities at the United Nations for vendors from developing countries in the context of the management reform, as requested in resolution 60/260.

Addressing reports of the OIOS, Singapore's representative noted that more than five months had passed since the decision to place eight staff members on administrative leave to facilitate the ongoing audit and investigation into the Organization's procurement activities.  Despite the human and financial resources that had been thrown into the investigation, not a shred of evidence had been adduced to substantiate the alleged "pervasive corruption" in the United Nations and "substantial evidence of abuse in procurement".  If the system was as flawed as the media had been led to believe by the Under-Secretary-General for Management and some major contributors, it would have been highly irresponsible for management to maintain the same procurement system.  Yet, day-to-day procurement was being carried out by the same personnel, using the same system.  It was unfortunate that the current Administration had allowed some of its senior management to pursue their personal agenda, allowing them to tarnish the United Nations image in the process.

Also participating in the debate were representatives of South Africa (on behalf of the "Group of 77" developing countries and China), Guyana (on behalf of the Rio Group), Syria and Egypt.

Numerous reports before the Committee were introduced by the Chairman, Audit Operations Committee, United Nations Board of Auditors, Sabiniano Cabatuan; Chief, Oversight Support Unit, Office of the Under-Secretary-General for Management, Jonathan Childerley; member of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), Andrzej T. Abraszewski; Under-Secretary-General for Internal Oversight Services, Inga-Britt Ahlenius; Acting Director of the Logistics Support Division of the Department of Peacekeeping Operations, Maxwell Kerley; and Acting Director of the Administrative Support Division of the Department of Peacekeeping Operations, Philip Cooper.

The Committee will continue its discussion at 10 a.m. Tuesday, 23 May.

Background

At the opening of its second resumed session this morning, the Fifth Committee (Administrative and Budgetary) was expected to take up a series of reports relating to peacekeeping financing and oversight of peacekeeping operations.

Financial Reports and Reports of Board of Auditors

The Committee had before it the report of the Board of Auditors on the accounts of United Nations peacekeeping operations for the period 1 July 2004 to 30 June 2005 (document A/60/5 (Vol.II)).  The Board's audit for the year ending  30 June 2005 covered Headquarters operations, 14 active field missions, one active field mission that was not visited because of the security situation, the United Nations Logistics Base at Brindisi, Italy, 22 completed missions, one liquidated mission, the Peacekeeping Reserve Fund, and the support account for peacekeeping operations.

The report states that the Board also addressed special requests from the Advisory Committee on Administrative and Budgetary Questions (ACABQ) and the General Assembly, and issued an unqualified audit opinion on the financial statements for the United Nations peacekeeping operations for the year ended 30 June 2005.  As requested by the ACABQ, the Board evaluated previous recommendations that had not yet been fully implemented.  Of a total of 78 recommendations, 38 (or 49 per cent) had been implemented, while 35 (45 per cent) were under implementation.  Five, or six per cent, had not been implemented.

Providing a financial overview for the reporting period, the Board notes that total income amounted to $4.5 billion and total expenditure to $4.1 billion.  The increase in expenditure of some 41 per cent is attributable mainly to the expanded operations of five recently established missions.  Outstanding assessments increased by 9 per cent to $1.66 billion, resulting in a reduction in the amount of cash available to settle liabilities (some $2.05 billion).  An amount of $705.2 million of the total $1.66 billion (42 per cent) had been outstanding for over a year, of which $153.9 million related to active missions; $537.7 million related to completed ones and $13.6 million related to special-purpose accounts.

On procurement and contract management, the report states that in addition to the planned review by the Office of Internal Oversight Services (OIOS), an external consulting firm was commissioned by the Administration to review the internal controls of the Procurement Service, covering only Headquarters-generated procurement, including for peacekeeping.  Consequently, the Board limited its audit primarily to determining the status of implementation of its previous recommendations.  It noted, among other things, that systems contracts had not been allocated on an equitable geographical basis, that vendor review committees had still not been established in all missions, and that guidelines for the implementation of ethical principles for United Nations procurement staff has yet to be promulgated.

Regarding air operations, the report notes that actual air transport expenditures amounted to $371.2 million -- some $88.3 million (19.2 per cent) less than the budgeted amount of $459.5 million.  Evaluating air operations at the mission level, as well as support provided by Headquarters, the Board noted that, among other things, only 43 per cent of air carriers awarded contracts during the 2005-2005 period were subjected to on-site quality inspections.  Also, the 90,973 actual total flight hours utilized were 32 per cent less than the 133,296 hours budgeted.

Recalling that the Secretary-General has called for a more integrated and unified United Nations, both at Headquarters and in the field, the Board comments that, as there was no formal definition of an integrated mission, its functions and structures and the resulting roles of various actors were not clearly understood.  The concept of integrated missions and their impact appeared not to have been adequately discussed with all the actors at the country office level.  One of the obstacles that could affect the success of an integrated mission remained the differences in mandates and the objectives of peacekeeping operations, compared with other United Nations entities.

According to the report, the Department of Peacekeeping Operations has initiated several projects to improve human resources management.  The Board noted that effectiveness of training had not been evaluated at all missions and that individual contractors were performing, on a continuous basis, tasks considered to be core functions.  By October 2005, a total of 264 investigations had been completed during the past 22 months in respect of sexual exploitation and abuse, resulting in action against 124 personnel.

The report also notes that the Administration reported to the Board 30 cases of fraud and presumptive fraud for the period ending June 2005, compared with six cases in the previous period.  The Administration reported that the United Nations had not incurred losses in nine cases.  An estimated loss of $1.83 million was incurred in respect of 17 other cases.  While the extent of the losses had not yet been determined in four cases, of the 30 cases reported, 25 related to the United Nations Mission in Sierra Leone (UNAMSIL).  The amounts involved -- where quantifiable -- amounted to some $330,808, covering 18 cases.  A total of 19 of the 25 cases (76 per cent) related to fuel fraud.  The estimated value of such fraud amounted to $1.5 million, or some 2.6 million litres of fuel.  A similar audit was also carried out at the United Nations Interim Force in Lebanon (UNIFIL).

On procurement and contract management, the Board recommends further initiatives to improve procurement opportunities for vendors from developing countries and countries with economies in transition to ensure a more equitable geographical distribution of contracts. It also recommends that the Administration hold administrative heads of all missions accountable for submitting complete procurement plans on time.  Air carriers should be subjected to on-site reviews in a cost-effective manner before adjudicating contracts.  The Administration should determine whether the change of air contracts to the new costing structure has resulted in savings.  It should also undertake a cost-benefit analysis to contribute to the justification of the need for executive jets at the United Nations Organization Mission in the Democratic Republic of the Congo (MONUC).

On inventory management, the Board recommends, among other things, that the Administration address all the matters highlighted in the internal audit and investigation reports and implement corrective measures to improve overall management of fuel at missions.  The Administration should also implement an electronic fuel accounting system in order to improve the monitoring of fuel at peacekeeping missions and to further prevent fuel mismanagement and fraud.  Regarding integrated missions, the Administration should, using the United Nations Development Group platform, consult with United Nations country teams from the first phase of the mission-planning process to ensure that their specialized knowledge and expertise are utilized.  Regarding fraud, the Board recommends that the Administration, in close consultation with peacekeeping missions, carefully analyze the elements leading to reported fraud and take the necessary punitive measures, draw lessons and share them systematically with other missions.

In its related report (document A/60/784), the Advisory Committee on Administrative and Budgetary Questions (ACABQ) states that it was informed by the Audit Operations Committee that the adoption of the International Public Sector Accounting Standards (IPSAS), which the Secretary-General intends to seek from Member States in 2006, would have significant implications for the United Nations.  It would involve, among other things, the funding of after-service liabilities, the possibility of financial statements reflecting negative equity, annual reporting cycles, a new enterprise resource planning system and capitalization and depreciation of assets expenditure.

The ACABQ notes that cancellation of prior-period obligations has increased from $73.6 million in 2004-2004 to $167.8 million in 2004-2005.  That may either be an indication of a need to improve budget planning and monitoring or of a risk that invalid obligations were initially raised, or a combination of the two.  The Advisory Committee shares the Board's concern regarding the matter and urges the Administration to take prompt action to implement measures to address any shortcomings.

With regard to registration of prospective local vendors, the Board had noted that the Procurement Service had envisaged new technical evaluation procedures based on a concept whereby a particular United Nations agency would take the lead on procurement activities within its area of expertise.  The goal was to improve the quality of vendors' technical evaluation by using expertise available within the system.  The ACABQ expressed concern that the approach could lead to inconsistency and expressed the view that a common framework or guidance was still required.  In further developing the concept, the Administration should pay due attention to the Boards' concerns by issuing guidelines to ensure consistency in the procedures to determine specific needs and to evaluate the ability of prospective vendors to meet those needs.

Noting that the failure to obtain performance bonds in a number of instances resulted in estimated additional coasts to the United Nations of an amount of some $1.5 million, the Advisory Committee states that it was informed that the Board could determine no mitigating reason why the performance bonds were not obtained.  The Committee supports the Board's recommendation that performance bonds be obtained in a timely manner and trusts that the Administration will thoroughly investigate the circumstances surrounding the cases mentioned by the Board and take appropriate action.

The ACABQ welcomes the Board's thorough reporting on air operations, which will aid the Committee and the Assembly in their examination of the peacekeeping performance reports and budgets.  The ACABQ notes that the Peacekeeping Department has now moved from the commercial industry approach of block-hours costing for air contracts to a costing structure whereby a basic monthly fee is paid, plus a fee for every hour flown.  While the Department contends that the savings realized in air operations were attributable to this new approach, no evaluation has been conducted to determine the effects and benefits of the new costing.  The ACABQ joins the Board in recommending that the Administration determine whether the change to the new costing has resulted in savings or brought other benefits.

The report notes that the ACABQ has supported the concept of regional cooperation among peacekeeping operations in the past.  While fully aware of the necessity to comply with mission mandates, the Advisory Committee does not understand the Administration's reluctance to systematize cooperation through the development of appropriate plans, instead of continuing to rely on ad hoc arrangements.  The Department of Peacekeeping should continue to explore ways to increase regional management of air assets and coordinate with the Department of Political Affairs, with a view to the sharing of assets between peacekeeping operations and special political missions.  The ACABQ shares the Board's view that the Administration should formalize the concept of integrated mission partnerships, determine their functions, structure and role, and finalize policies and guidelines to govern them.  In doing so, attention should be given to establishing clear lines of accountability within the integrated mission concept.

On the support account, the ACABQ remains of the view that its analysis is needed along the lines of what is described in its previous report and that the Board is an appropriate entity to undertake this work.  Concerning the issue of fraud and presumptive fraud, the ACABQ shares the Board's concern over the increase in cases of such fraud and encourages the Administration to be proactive in its dealing with the mission to ensure that cases are reported in a timely and accurate manner.

Another report before the Committee provides additional information in response to the recommendations of the Board of Auditors (document A/60/691).  Given that the Administration has concurred with many of the Board's recommendations and that most of the comments of the Secretary-General have been duly reflected in the report of the Board, it addresses only those recommendations that require further comments from the Administration.

Responding to one of the recommendations, the Accounts Division states that it continues to reiterate to field missions and to the Peacekeeping Department the importance of accuracy in establishing obligations, which would ultimately result in reduced savings.  The Controller has also written to the Office of Mission Support, asking for corrective actions to be taken.  The obligations at the close of fiscal 2006 will be closely reviewed for appropriateness and accuracy.

In connection with the Board's statement that clearance of long-outstanding amounts would be possible only with intervention of Member States concerned, the report states that the Secretary-General is submitting a proposal on consolidation of accounts, which, if approved by the Assembly, would permit the settlement of long-outstanding payables in the accounts of closed missions with cash deficits.

The report also states that opportunities for further collaboration among United Nations organizations will be discussed at the Inter-Agency Procurement Working Group meeting in June 2006.  The Department of Peacekeeping Operations confirms that field missions are current in the periodic submission of performance evaluation reports to Headquarters.  The delay noted with respect to the United Nations Mission in the Sudan (UNMIS), occurred during the start-up phase of the Mission and has since been corrected.  On yet another recommendation, the Administration reports that on 30 January, the Peacekeeping Department's expanded Senior Management Team approved the policies and procedures on strategic deployment stocks and the promulgation process is in progress.

In connection with another proposal of the Board, the administration reports that there have been disciplinary/punitive actions already taken on eight of the 18 fraud cases relating to the United Nations Mission in Sierra Leone.  While the disappearance of a staff member has made it impossible for any further action to be taken on that staff member's case, due process is ongoing with respect to the remaining nine cases.  The annual reminder sent out to all peacekeeping missions will stress strict compliance with the requirement of ensuring accurate and complete reporting of cases of fraud.

However, the recommendation for development of regional coordination plans aligned to the missions' objectives has not been accepted by the administration.  Inter-mission cooperation is constrained by individual mission mandates, limitations on resource-sharing and operational priorities.  A "plan" for regional coordination as recommended by the Board of Auditors is not appropriate but, where useful, is undertaken through regular and systematic communications, information exchange, and political interventions to address arms control, illicit/foreign armed groups and other issues that are by definition "cross-border".

Peacekeeping Financing

The first report before the Committee was the Secretary-General's budget proposal for the United Nations Peacekeeping Force in Cyprus (UNFICYP) for the period from 1 July 2006 to 30 June 2007 (document A/60/592) in the amount of some $44.95 million.  Some $20.88 million of that budget would be funded through voluntary contributions from the Governments of Cyprus ($14.37 million) and Greece ($6.5 million).

In his performance report on UNFICYP for 2004-2005 (document A/60/584), the Secretary-General suggests that Member States waive their respective shares in other income for the period ended 30 June 2005 amounting to $541,100 and their respective shares in the amount of $191,300 from the unencumbered balance of $792,200 for the period ended 30 June 2005, to be applied to meeting the current and future after-service health insurance liabilities of the United Nations.  The Assembly would also need to decide on the treatment of the remaining unencumbered balance of $600,900 for the period ended 30 June 2005.

The Advisory Committee on Administrative and Budgetary Questions (ACABQ), in a related report (document A/60/785), recommends that the unencumbered balance of $792,200, as well as other income and adjustments in the amount of $541,100 be credited to Member States in a manner to be determined by the Assembly.  The ACABQ also recommends approval of the Secretary-General's budget proposal for UNFICYP for 2006-2007.

According to the Secretary-General's report on the financing of the United Nations Mission of Support in East Timor (UNMISET) (document A/60/703), following the end of its mandate on 20 May 2005, the Mission's assets with a total inventory value of $16.99 million were transferred to the United Nations Office in Timor-Leste (UNOTIL), with action on their disposition, including donation to the Government of Timor-Leste, to be taken upon the expiration of the mandate of UNOTIL.  As a result of the adjustment of the UNMISET asset disposition plan, the total inventory value of assets donated to the Government as at 21 October 2005 amounted to some $22.63 million, with a corresponding residual value of $9.29 million.

In his performance report on the budget of UNMISET for the period from 1 July to 30 June 2005 (document A/60/614), the Secretary-General recommends that Member States waive their respective shares in other income amounting to $13.17 million, and their respective shares in the amount of $870,500 from the unencumbered balance of $3.6 million, to be applied to meeting after-service health insurance liabilities of the United Nations.  The Assembly should further decide on the treatment of the remaining unencumbered balance of $2.73 million for the period ended 30 June 2005.

Commenting on these documents, the Advisory Committee, in a related report (document A/60/789) recommends that the Assembly take note of the report on the final disposition of the assets of UNMISET and that the unencumbered balance of some $3.6 million, as well as other income and adjustments in the amount of $13.17 million be credited to Member States in a manner to be determined by the Assembly.

In his performance report on the budget of the United Nations Mission in Ethiopia and Eritrea (UNMEE) for the period from 1 July to 30 June 2005 (document A/60/615), the Secretary-General recommends that Member States waive their respective shares in other income for the period ended 20 June 2005 amounting to some $7.15 million and their respective shares in the amount of $6.04 million from the unencumbered balance of about $25 million for the same period, to be applied to meeting the current and future after-service health insurance liabilities of the Organization.  The Assembly should also decide on the treatment of the remaining unencumbered balance of $18.97 million for the period ended 30 June 2005.

0In his budget for UNMEE for the next financing period (document A/60/636), the Secretary-General recommends that the Assembly appropriate an amount of some $175.27 million for the maintenance of the Mission for the period from 1 July 2006 to 30 June 2007.

The Committee also had before it a performance report on the budget of the United Nations Observer Mission in Georgia (UNOMIG) (document A/60/643), which amounted to some $31.93 million gross for the period from 1 July 2004 to 30 June 2005 and provided for 135 military observers, 18 civilian police, 114 international staff and 209 national staff.

The Secretary-General proposes that Member States waive their respective shares in other income/adjustments for that period amounting to $999,800, as well as their respective shares in the amount of $206,500 from the unencumbered balance of $855,100, to be applied to meeting the current and future after-service health insurance liabilities of the United Nations.  Another decision requested from the Assembly relates to the treatment of the remaining unencumbered balance of $648,600 for the same period.

In his report on the UNOMIG budget for 2006-2007 (document A/60/652), the Secretary-General estimates that the requirements of the Mission for the period from 1 July 2006 to 30 June 2007 would amount to some $33.68 million.  That would provide for the deployment of 135 military observers, 18 United Nations police officers, 117 international staff, 193 national staff and one United Nations volunteer.

The Advisory Committee, in a related report (document A/60/810) makes several recommendations that would entail a net reduction of $66,400 in the proposed budget for UNOMIG for 2006-2007.  Taking into account those comments, it proposes an appropriation of an amount of some $33.62 million for the next financial year.

As for the 2004-2005 financial period, the ACABQ recommends that the unencumbered balance of $855,100, as well as other income and adjustments in the amount of $999,800 be credited to Member States in a manner to be determined by the General Assembly.

On the United Nations Interim Administration Mission in Kosovo (UNMIK), the Committee had before it a proposed budget in the amount of some $219.21 million (document A/60/684) and a performance report for 2004-2005 (document A/60/637).  In connection with these documents, the ACABQ, in a related report (document A/60/809) recommends acceptance of the Secretary-General's budget proposal.  In connection with the performance report, as with other missions, the Advisory Committee recommends that the unencumbered balance of $128,200, as well as other income/adjustments in the amount of some $10.3 million for the period ended 30 June 2005 be credited to Member States in a manner to be determined by the Assembly.

In his report on the budget for the United Nations Disengagement Observer Force (UNDOF) (document A/60/641), the Secretary-General recommends that the Assembly appropriate some $39.98 million for the maintenance of the mission for the 12-month period from 1 July 2006 to 30 June 2007.

The report of the Advisory Committee (document A/60/811) contains a recommendation by which the Assembly would accept the Secretary-General's proposed budget for UNDOF for the next financial year.  The ACABQ also makes observations and recommendations regarding the administration and management of the Force and opportunities for further savings.

In connection with UNDOF's performance report (documents A/60/628 and Corr.1), the ACABQ recommends that the unencumbered balance of $82,200, as well as other income and adjustments in the amount of some $1.9 million be credited to Member States in a manner to be determined by the Assembly.

The Secretary-General's proposed budget for UNIFIL for 2006-2007 (document A/60/642) amounts to some $94.11 million, but the Advisory Committee (document A/60/812) recommends that the estimate be reduced to $93.94 million.

In his performance report on the budget of UNIFIL for the period from 1 July 2004 to 30 June 2005 (document A/60/629), the Secretary-General recommends that the Assembly decide that Member States waive their respective shares in other income for the period ended 20 June 2005 amounting to $897,000 and their respective shares in the amount of $3.72 million from the unencumbered balance of some $25 million for the same period, to be applied to meeting the current and future after-service health insurance liabilities of the Organization.  The Assembly should also decide on the treatment of the remaining unencumbered balance of $2.8 million for the period ended 30 June 2005.

In this connection, the Advisory Committee recommends that the unencumbered balance of $3.72 million, as well as other income and adjustments in the amount of some $5.1 million be credited to Member States in a manner to be determined by the General Assembly.

As with other missions, the performance report for UNAMSIL (document A/60/631) suggests that Member States waive their respective shares (in this case, amounting to $72.21 million and $6.54 million, respectively) of income and part of the unencumbered balance for 2004-2005 to meet after-service health insurance liabilities of the Organization.  He also states that the Assembly needs to decide on the treatment of the remaining unencumbered balance of $20.54 million for the period ended 30 June 2005.

The ACABQ, in a related report (document A/60/786), recommends that the whole unencumbered balance of $27.08 million, as well as other income and adjustments in the amount of $72.21 million, be credited to Member States in a manner to be determined by the Assembly.

On the financing of the Logistics Base in Brindisi, the Committee had before it a budget proposal (document A.600/711) in the amount of $35.62 million.  The Secretary-General's recommendations in connection with the Base's performance report for 2004-2005 are contained in document A/60/700).

In connection with these proposals, the Advisory Committee, in a related report (document A/60/787) recommends acceptance of the proposed budget for 2006-2007.  It also recommends that the unencumbered balance of $237,300, as well as other income and adjustments for the period ended 30 June 2005 in the amount of $1.16 million be credited to Member States in a manner to be determined by the Assembly.

The budget proposal for the peacekeeping support account for the period from 1 July 2006 to 30 June 2007 (document (A/60/727) amounts to $189.54 million, but the recommendations of the ACABQ (document A/60/807) would entail a reduction of over $31.66 million.  The Committee also makes a number of observations and recommendations with regard to the administration and management of the resources of the support account for peacekeeping operations and areas of possible savings.  The Advisory Committee continues to emphasize that the requirement for additional functions or tasks to be performed should not necessarily lead to a requirement for additional posts.  Similarly, the creation of new units should not be proposed as a means to justify new or higher-level posts.  The support account should not be used as a vehicle to propose the establishment of posts that more properly should be proposed under the regular budget.

As support account posts are of a temporary nature, the need for them must be reviewed in terms of evolving requirements, and the presentation of support account requirements must justify the "totality" of resources rather than just any increase proposed.  There is also a need for regular reviews of the effectiveness and efficiency of the management processes in order to identify what efficiency gains have been achieved and what further gains are possible.  The report also addresses the use of the funds for consultancy, the review of the Peacekeeping Department and a number of other analyses already under way.

The Advisory Committee also notes that the resources proposed for some items under the support account are but part of a quantum of requirements that relate to the follow-up of the 2005 World Summit Outcome and the report of the Secretary-General entitled "Investing in the United Nations: for a stronger Organization worldwide".  Having consistently cautioned against a piecemeal approach, the ACABQ recommends deferring final decisions on some of the proposals until consideration of the follow-up reports is completed.

Of the 142 additional posts proposed, the Advisory Committee has recommended approval of a total of 55 posts, proposing that 45 posts not be approved and that action on 42 be deferred.  Of the posts recommended for deferral, 22 would be considered in the context of the Secretary-General's report to be presented in May 2006.  Another 20 posts recommended for deferral relate to the OIOS, pending the conclusion of the ongoing evaluation of the Office.

Accordingly, the Advisory Committee recommends that the Assembly approve total staffing and non-staffing requirements of some $157.86 million gross for the period from 1 July 2006 to 30 June 2007.  Should the Assembly not be able to take a decision by 30 June 2006 on the report requested to be submitted in follow-up to the Secretary-General's reform report, it may wish to consider approving general temporary assistance equivalent to 50 per cent of the posts deferred. This would amount to an additional some $2.43 million (including associated non-post resources).

The Advisory Committee also recommends that the amount of $15.8 million in excess of the authorized level of the Peacekeeping Reserve Fund, related to the period ended 30 June 2005, be applied to the resources required for the period from 1 July 2006 to 30 June 2007.

The report of the Office of Internal Oversight Services on the  comprehensive management audit of the Department of Peacekeeping Operations (document A/60/717) contains recommendations on improving the management of peacekeeping by strengthening and ensuring enforcement of internal controls, placing emphasis on ethical behaviour and accountability and introduction of high standards of efficiency.  In total, as part of its audit, the Office has made 158 recommendations, including 105 critical ones, in the seven audit reports that were issued to the Department of Peacekeeping Operations, the Department of Management, and the Department of Political Affairs.

The report lists the Peacekeeping Department's recent initiatives, which include the introduction of the integrated mission planning process for new missions; the establishment of strategic deployment stocks, which has reduced the time frame for mission start-up; the design and delivery of training programmes for peacekeeping personnel; and a robust response to allegations of sexual exploitation and abuse in field missions. However, in the view of OIOS, those achievements have not kept pace with the challenges inherent in the rapid increase in field operations.  More needs to be done by the Peacekeeping Department in cooperation with the Department of Management.  The OIOS stresses the importance of the Charter of the United Nations, which explicitly calls for the necessity of securing the highest standards of efficiency, competence and integrity. In that context, the OIOS also notes that the Guidelines for Internal Control Standards for the Public Sector of the International Organization of Supreme Audit Institutions emphasize the responsibility of management for upholding ethical values and professional standards.

In the opinion of the OIOS, the control environment in the Department of Peacekeeping Operations and the Department of Management has been inadequate.  The OIOS is particularly concerned about the area of procurement, where it found a number of cases indicating systematic breaches of United Nations regulations and rules. One of the root causes of this situation is the reluctance of management to hold staff members accountable for violations of rules and regulations and poor management.  This has led to an unacceptably high exposure to the risk of fraud and abuse. Immediate steps are needed to improve management practices by establishing appropriate mechanisms to ensure managerial accountability at all levels, both at Headquarters and in field missions.  It is encouraging to note that management has initiated an inquiry into the specific cases highlighted in the present report to address accountability.

The OIOS also identified considerable scope for improving the management of peacekeeping operations by (a) reorganizing the budget process for efficiency and the elimination of duplication; (b) delegating recruitment authority to field missions concomitant with effective monitoring at Headquarters; (c) optimizing the use of information and communication technology; (d) strengthening the capacity for mission planning and the provision of strategic guidance and direction; (e) improving coordination between the Department of Peacekeeping Operations and other United Nations departments and agencies; and (f) placing greater emphasis on the identification and dissemination of best practices from positive and negative lessons learned.

In the area of human resources management, the Office notes the high vacancy rate in field missions and the lack of transparency in recruitment processes, which did not provide assurance that the best candidates were selected.  Significant improvements are needed to make the delegation of authority given to the Peacekeeping Department an efficient arrangement for providing staff to field missions.  The Department has concentrated its recruitment authority at Headquarters, resulting in the same inefficiency that was to be overcome by the delegation of authority.  The OIOS believes that the Department of Management needs to review the success of the delegation of authority to the Department of Peacekeeping Operations and the effectiveness of the Office of Human Resources Management in monitoring that authority.

Programme of Work

Speaking on behalf of the "Group of 77" developing countries and China, KAREN LOCK (South Africa) expressed regret that with over 150 reports for the Committee to consider in the coming weeks, she had to -- once again -- register the Group's concern with the late submission of a substantial number of documents by the Secretariat.  That had a negative impact on the work of the Committee.  The Group of 77 was concerned with the tendency to submit budgets of peacekeeping operations late and in breach of the six-week rule set by the Assembly.  The size of peacekeeping budgets had increased significantly over the past few years, but Member States were put in a position where they had less and less time each year to complete their consideration of the resource requirements and policy aspects of peacekeeping.

On the provisional programme of work, she stressed its tentative nature and the Group's expectation that the Bureau would amend it throughout the session to reflect the progress made in the negotiations.  She regretted that the Committee would not be able to adopt a comprehensive resolution on peacekeeping issues in this session due to the deferral of the cross-cutting issues.  She realized that the budgets of missions were time-bound, but expected that the programme of work would provide Member States with adequate time to complete a thorough consideration thereof.

The Committee would also soon receive the reports on Secretariat and management reform that the Assembly had requested, she added.  It was imperative that the Secretariat implement the provisions of resolution 60/260 and that the reports should be prepared strictly in accordance with that text.  Adequate time should be provided to consider those reports.  Every effort should be made to avoid a repetition of the situation in April when no formal decision was taken to extend the session.  Rules of procedure of the Assembly should be respected.

ENNO DROFENIK (Austria), speaking on behalf of the European Union, said that the Committee had a full and demanding agenda in front of it.  The additional demands on the Committee, brought about by the need to discuss the reports emerging from the implementation of the World Summit, had bee accommodated well by extending the session by two weeks, and he hoped that their consideration would be concluded by the end of June, at the latest.  Also to be considered was the peacekeeping budget, including several large and complex missions.  The Union attached great importance to cross-cutting peacekeeping issues.  It was key that the Committee gave relevant policy guidance before approving the resources for peacekeeping operations.

He also noted with concern that the ACABQ had neither commented on the overview report on peacekeeping financing nor on some other thematic reports scheduled for the session.  While at this stage a cross-cutting resolution might not be possible, important thematic issues should be addressed in the appropriate context.

Regarding the expected reports on the implementation of the Summit, including procurement, oversight and governance, he said that he looked forward to a constructive discussion with all Member States.  He also requested the Secretary-General to lift the spending cap on the 2006-2007 budget.

He also highlighted the importance of agreeing on a common strategy for the Capital Master Plan.  The Union stood ready to take a decision at the next session.  The Union had a general preference for strategy IV.  It was regrettable that Assistant Secretary-General Reuter had, unfortunately, resigned from his position.  It was necessary to take the project forward and avoid any further delays.  With a full agenda before the Committee, it was necessary to work in the spirit of cooperation and consensus.  The experience of last month should not be repeated, and the practice of consensus should be continued.

GEORGE TALBOT (Guyana), on behalf of the Rio Group, said that in pursuit of increased effectiveness, efficiency and relevance of the United Nations in the twenty-first century, the consideration of extremely difficult issues was unavoidable.  Notwithstanding, the pursuit of consensual outcomes should remain a common objective.  The Rio Group was committed to the reform of the United Nations.  In that regard, resolution 60/260 provided much scope for further endeavours.  It was critical that the momentum was preserved.

The Organization's peacekeeping work was the definitive flagship of its performance, he continued.  Adequate financing of the missions was crucial.  Within the region of Latin America and the Caribbean, he stressed the role of the United Nations Stabilization Mission in Haiti (MINUSTAH).  Also, with matters of peacekeeping financing being the primary focus of the second resumed session, the Group believed that a broad overview of the issues common to the performance of all the missions was critical.  He deeply regretted that the report of the ACABQ on cross-cutting issues would not be available for consideration.  Clearly, the ongoing processes of reform were pivotal.  However, adequate time was needed to consider peacekeeping operations in their entirety.  The Bureau should allocate appropriate time for the consideration of all agenda items.  He also emphasized the importance of the timely provision of all documentation.

On the Capital Master Plan, 0he said that having approved an interim expenditure in the first resumed session, the Committee must proceed swiftly with the articulation of a clear strategy for the renovations.  The Group also noted with regret the departure of the Executive Director.

The United Nations was often cited for perceived weaknesses in its management practices, he continued.  The implementation of measures to increase efficiency and effectiveness of programmes and improving the system of accountability, the integrity and transparency of the administration of justice within the system would ensure the Organization's commitment to the highest standards of performance and conduct.  The Group viewed as unfortunate any imposition on a restriction on the authorized expenditures of the Secretary-General, and any undue linkage with future negotiations in the context of the reform.

The Committee then approved its programme of work, on the understanding that adjustment would be made, as needed, in the course of the session.

Introduction of Reports

SABINIANO CABATUAN, Chairman of the Audit Operations Committee of the United Nations Board of Auditors, introduced the report of the Board of Auditors on the United Nations peacekeeping operations for the 12-month period ended 30 June 2005.  In line with regulation 7.8 of the United Nations Financial Rules and Regulations, the ACABQ had expressed its concurrence with the Board's proposal to re-allocate its assignments among the Board's members.  That rotation was determined in line with best practice and with a view to further optimize the workload and effectiveness of the Board's audit teams.

He noted that today marked the Board's first formal encounter with the Fifth Committee this year.  It came at a time when the Organization was in the midst of considering wide-ranging reforms.  The Panel of External Auditors had welcomed the Administration's decision to adopt by 2010 an accounting framework consistent with international standards.  Such a change from the United Nations Systems Accounting Standards to IPSAS had significant implications for the United Nations system.  The Board believed, however, that the benefits of adopting IPSAS would by far outweigh its costs.

Providing a brief overview of the Board's report on United Nations peacekeeping operations, he noted that, for the year ended 30 June 2005, the Board's audit of the peacekeeping operations, aside from Headquarters, included visits to two field missions funded from the regular budget, 15 missions funded from special assessed contributions, and the United Nations Logistics Base.  The audit conducted at Headquarters also covered the Peacekeeping Reserve Fund and the support account for peacekeeping operations, one liquidated mission and  22 completed missions.  The Board continued to pay special attention to the ACABQ's concerns, including with respect to the ageing of recommendations, lessons learned with regard to the assignment of resident auditors in the missions, and implementation of standardized procedures and methods for information-gathering in respect of results-based budgeting.

Drawing the Committee's attention to the Board's audit opinion, he noted that, while the Board had not qualified its opinions on the financial statements presentation and the regularity of the transactions it had tested, it had nevertheless emphasized the review of procurement activities undertaken by the OIOS, the review of the Procurement Services' internal controls done by a private firms, and the forensic audit commissioned by the Administration to be done in a context of the host country legal system.

Highlighting the Board's findings, he said the total income for peacekeeping operations had risen by $1.5 billion -- a 50 per cent increase compared with the preceding financial year of $3 billion.  The increase in income was largely in line with the expected 41 per cent rise in expenditures to $4.1 billion this year, compared with $2.9 billion last year.  The outstanding assessed contributions had registered an increase of 9 per cent compared with the previous year.  In operational terms, the Peacekeeping Department only had cash of $1.74 for every $2.05 of liability as of 30 June 2005.

Outlining some of the Board's observations, he noted that, on the issue of procurement, the Board had confined its review of the Peacekeeping Department's procurement and contract management mostly to the extent of determining the status of implementation of its previous recommendations.  While the Board had noticed improvements in certain areas, it remained concerned about several issues, including that vendor review committees had still not been established at all missions.  Air transport expenditures had amounted to $371.2 million out of $459.2 million budgeted.  In terms of managing air assets, only 43 per cent of the contracts awarded during the 2003-2004 period had been subjected to on-site aviation quality inspection.  The 90,973 total flight hours utilized were 42,323 hours or 32 per cent less than the 133,296 budgeted hours.  While such savings were welcome, they showed a need for improvement in calculating expected flight hours on which funds were allocated.

On strategic deployment stocks, he noted that the draft policies and procedures in respect of strategic deployment stocks, except for the accounting guidelines and procedures, were still to be promulgated.  There was also no formal definition of an integrated mission, resulting in a lack of understanding of its functions and structures, and of the collective responsibilities of key players.

Among other issues, he noted that, while resident auditors continued to be a valuable internal oversight mechanism within peacekeeping operations, their deployment was based mostly on expenditure levels, while factors such as risk and complexity of operations were not fully considered.  On the issue of fraud and presumptive fraud, he noted the Administration had reported 30 such cases as of  30 June 2005, compared to six last year.  Of the 30 reported cases, 25 had occurred in UNAMSIL, where 19 of those cases were related to fuel fraud.  In terms of the status of implementation of previous recommendations the Board had noted that 45 per cent were under implementation, compared to 48 per cent last year.

JONATHAN CHILDERLEY, Chief, Oversight Support Unit, Office of the Under-Secretary-General for Management, then introduced the Secretary-General's report on the implementation of the Board's recommendations.  The Administration had made every effort to provide full and complete information to the Board for inclusion in its report.  As a result, in most cases the Board's report adequately reflected the Administration's position on each recommendation.  Thus, in the Secretary-General's report, it had only proved necessary to provide further information on 22 out of 72 recommendations.

ANDRZEJ T. ABRASZEWSKI, of the ACABQ, introduced that body's related report.  The Advisory Committee commended the Board for its reader-friendly report and welcomed the inclusion of details concerning the age of recommendations that were either under implementation or had not been implemented.  He also welcomed the Board's thorough reporting on air operations.

Statements

Mr. DROFENIK (Austria), speaking on behalf of the European Union and associated States, commended the Board of Auditors for having further improved the structure of the reports and urged the Secretariat to implement its recommendations as soon as possible.  He noted with concern that 40 of previous recommendations had not yet been implemented.  They should be implemented without delay.  A more stringent approach as far as responsibilities and time frames of implementation was needed.  The Union was also alarmed over the outstanding contributions for 2004-2005 in the amount of $1.66 billion -- that represented an increase of 9 per cent over the 2003-2004 period, having a negative impact on cash flows and encouraged cross-borrowing.  It was of ultimate importance that all Member States paid their peacekeeping dues on time and in full to ensure full implementation of peacekeeping mandates.

Highlighting some issues of particular concern, he emphasized the need to establish effective procurement policies.  A number of important recommendations had been formulated in that regard.  For the system to run efficiently, the right tools must be put in place.  The Department needed comprehensive rules and regulations, better internal control mechanisms, effective vendor review and performance bonds, a cadre of trained and professional staff and a comprehensive and up-to-date information technology system to ensure a joined-up approach in the procurement process.

The Union shared the concern of the Board over the appearing trend of over-budgeting for air operations, he continued.  He welcomed the fact that the Department of Peacekeeping Operations had now instituted a costing structure for all air carrier contracts, yet noted with concern that it had yet to conduct a cost-benefit analysis of the new system.  The Union was mindful of the fact that the overview report on peacekeeping financing proposed in paragraph 58 provided a means for Procurement Service to undertake such a review, and regretted that the report would not be considered at this session.  Given that air services accounted for almost 20 per cent of the peacekeeping budget, he supported the recommendation of the Board and the ACABQ that the Department undertake such a cost-benefit evaluation as soon as possible.

Continuing, he supported the concept of regional cooperation for field operations.  Regional cooperation between peacekeeping operations and special political missions could result in substantial efficiency gains.  Such cooperation should take place on the basis of an appropriate plan and should not rely on ad hoc arrangements.  The Union was aware of the horizontal review of inter-agency coordination and integrated missions, currently conducted by the Peacekeeping Department.  He supported the Board's recommendation that the concept of integrated mission partnerships should be formalized and further developed.

He also noted with concern that reports of fraud and presumptive fraud had increased significantly and requested the Secretary-General to thoroughly investigate and hold accountable those responsible for fraud, while making every attempt to recover misappropriated funds.

PAULO ROBERTO CAMPOS TARRISE DA FONTOURA (Brazil) said that he had carefully considered the Board of Directors' report and related ACABQ report.  He agreed that the Board should be commended for presenting a clear and reader-friendly report.  On procurement and contract management, he agreed with the Board that further action was needed to improve opportunities for vendors from developing countries to improve geographical distribution of contracts.  However, he was disappointed that no concrete recommendations had been made in that regard by the ACABQ.  He suggested that in future reports, when presenting the origin of vendors, the region designated as Americas, as indicated in the Board's report, should be divided into North America and Latin America.  He also expected concrete and affirmative measures to increase procurement opportunities in the United Nations for vendors from developing countries in the context of the management reform, as requested in resolution 60/260.

Regarding air operations, he welcomed the recommendation of the Board that the Secretariat should implement measures to ensure that technical compliance and inspection evaluation were carried out on all missions as a means of guaranteeing the carriers' compliance with aviation and safety requirements.  It was also important that the Secretariat maintain a database of all inspection reports.  Nevertheless, his delegation was concerned over the information that the lack of staffing resources in the Air Transport Unit had impeded its ability to perform inspections.

In the field of vehicle fleet management, he agreed with the Board that the Secretariat should reinforce the implementation of the rotation policy at missions where vehicles within the same categories were rotated to optimize efficiency and utility, taking into account the different environments of the mission.  He also stressed the importance of strengthening accountability in the Organization for the effective and efficient implementation of legislative mandates. Accountability of the Secretariat to all Member States was a fundamental part of the management reform.  In that regard, clear parameters should be proposed for its application, as well as instruments for its enforcement without exception, at all levels.

WARREN SACH, United Nations Controller, introduced the Secretary-General's reports regarding the administrative and budgetary aspects of the financing of United Nations peacekeeping operations.  The scope, dynamic nature and volatility of peacekeeping activities continued to challenge the Organization's ability and capacity in deploying and managing 15 peacekeeping operations and 16 political and peacebuilding missions in the past 12 months.  The completion of the mandates of UNAMSIL and UNMISET in May 2005 and December 2005, respectively, had provided little respite for the Secretariat as it moved ahead with the administrative and logistical backstopping towards the full deployment of military and civilian personnel in the UNMIS and the expansions of the military and civilian personnel of the United Nations Operation in Côte d'Ivoire (UNOCI) and the United Nations Organization Mission in the Democratic Republic of the Congo (MONUC).

With the recent completion of all of the budgets for the period from 1 July 2006 to 30 June 2007, the total peacekeeping budget level for the 2006-2007 period, including the budgets for the support account and the Logistics Base, was currently estimated at $4.8 billion.  That represented a decrease of $256.4 million equivalent to 5.1 per cent, over the total approved peacekeeping budget of $5.0 billion for the period from 1 July 2005 to 30 June 2006.

In that regard, he added, the Secretariat had originally planned to submit its full 2006-2007 budget in line with the normal submission cycle.  However, pending the Security Council's decision on the Secretary-General's proposals, including the planned withdrawal of the United Nations Operation in Burundi (ONUB) by 31 December 2006, the Secretariat had felt it prudent to request interim financing under commitment authority for the period from 1 July to 31 October 2006.  The Secretary-General intended to submit the full 2006-2007 budget for ONUB during the regular part of the sixty-first session.

The overall decrease between the 2006-2007 and 2005-2006 period was also attributable to the closure of UNAMSIL and UNMISET, as well as slight reductions in the resource requirements for several other missions.  The decrease might be temporary, taking into account current developments in some of the missions that might result in additional resource requirements for the 2006-2007 period.  An impending Security Council decision on the Secretary-General's proposals for the troop strength of UNOCI would probably result in additional resource requirements.  Resource requirements for MONUC had been based on the assumption that the presidential and legislative elections would be held by 30 June 2006.  in connection with the delay in the holding of elections in the Democratic Republic of the Congo and pending the determination of the full resource requirements of the Mission arising from the continuing support to the elections, it was the Secretary-General's intention to absorb them, to the fullest extent possible, from within the 2006-2007 budget for MONUC.

As the structure and role of UNMEE and MINUSTAH remained unclear, it remained difficult to determine how the Security Council's decisions on those missions would impact the total 2006-2007 peacekeeping budget level, he continued.  The Security Council's forthcoming decision on the options of UMMEE's future might require the submission of a lower 2006-2007 budget than the original 2006-2007 budget now before the Assembly.  While it was difficult to ascertain the final resource requirements for 2006-2007 at the current stage, it was possible that the total level might equal -- if not exceed -- the $5.0 billion budget for the 2005-2006 period.

In response to the Assembly's request in its resolution 59/296 of June 2005, the Secretary-General's report (document A/60/696) provided an overview of the financial and administrative aspects of the financing of United Nations peacekeeping operations.  It provided consolidated information on budget performance for the 2004-2005 period and on the budget proposals for the 2006-2007 period.  The overview report also provided responses on the implementation of requests in General Assembly resolution 59/296 and requested the Advisory Committee in its general report on the financing of United Nations peacekeeping operations.

On the budget performance for the period from 1 July 2004 to 30 June 2005, he noted that total resources for the 2004-2005 period amounted to $4.4 billion, inclusive of the support account and the Logistics Base.  Related expenditures amounted to $4.1 billion, resulting in an unspent balance of $272.9 million, which was equivalent to 6.2 per cent of the total appropriation.  The overall budget implementation rate was 94 per cent, which was slightly lower than the overall implementation rate of 95 per cent for the previous financial period from 1 July 2003 to 30 June 2004.

He noted that the 2006-2007 budgets took into account the closure of UNMISET in May 2005, the closure of UNAMSIL in December 2005, the continued downsizing of UNMIK and reduced requirements for several active missions.  The interim financing for ONUB was proposed, pending the Council's decision on the Secretary-General's proposal for the withdrawal of ONUB from Burundi by 31 December 2006.  The 2006-2007 period would also reflect the full deployment of authorized military and police personnel in UNMIS and the full deployment of the authorized increases in the military and police personnel in MONUC and UNOCI.

He said he wished to inform the Committee on the impact on the performance reports and 2006-2007 budgets on the proposed funding of the liabilities for after-service health insurance benefits.  The Secretary-General's proposals for actions to be taken by the Assembly in the 2004-2005 performance reports had been overtaken by events and as a result, the draft resolutions to be considered by the Committee during its informal consultations would reflect the full return to Member States of the unspent balances and other income, as recommended by the Advisory Committee in its various reports.  Regarding the impact of Assembly resolution 60/255 on the proposed 2006-2007 budgets, he said the draft resolutions to be considered by the Committee would reflect the reduction of amounts relating to the additional 4 per cent of total common staff costs, as those amounts had not been taken into account in the Advisory Committee's recommendations in its reports issued to date.

MAXWELL KERLEY, Acting Director of the Logistics Support Division of the Department of Peacekeeping Operations, introduced the Secretary-General's reports on the analysis of the Logistics Base for the provisions of efficient and economical communications and information technology services (document A/60/715) and the transfer of vehicles with high mileage to the Logistics Base (document A/60/699).

According to the first of those documents, the Secretariat has conducted a review of its peacekeeping operations and identified the functional areas that could be undertaken at the Logistics Base to provide efficient and economical service to the Organization.  Functions proposed for the establishment at the Base in 2006-2007 include the establishment of a Regional Aviation Safety Office in Brindisi to monitor closely and oversee the safety issues for aircraft deployed in the peacekeeping missions.  The establishment of this office was recommended by the OIOS, and details are included in the 2006/2007 cost estimates for the Logistics Base.  Also included in those cost estimates is the Peacekeeping Department's proposal to create a Training Delivery Cell at the Logistics Base, augmenting training resources to be transferred from United Nations Headquarters.  This relocation is expected to result in cost savings by increasing the efficiency and effectiveness of peacekeeping training along with facilitating increased training in cooperation with Member States.

A significant increase in the aviation fleet of the Department of Peacekeeping Operations in recent years has necessitated the strengthening of the Department's aviation programme for commercially contracted and Government-provided air assets by establishing a Strategic Operations Centre to maximize the global use of United Nations air assets.  It is proposed that the Centre be established at the Logistics Base and consist of the Strategic Air Operations Centre and the Aviation Quality Assurance Programme.  Also proposed is the establishment of a Central Design Unit in Brindisi to reduce or eliminate the requirement for those skills in many missions and standardize designs and drafting of accommodation and other engineering work.  To establish the Department's global Geographical Information System capacity, in particular in support of rapid mission start-up and improvement of field mission operational readiness, it is proposed that a Geographical Information System Centre be established in Brindisi.

Major improvements in relation to the strategic deployment stocks involve increased capacities to support the material requirements of new minimum operating safety standards; increase in the variety and quantities of fuel equipment to support the rapid deployment of increasing numbers of aircraft in remote locations; and creation of the second "fly-away kit" to provide the capacity to support multiple rapid deployments of new or expanding peacekeeping operations.

In the area of the information and communication technology, the Department of Peacekeeping Operations is proposing the establishment a secondary active communications facility and a disaster-recovery and business-continuity centre.  This would ensure the safety of the United Nations information/data assets in the event of a catastrophic incident and provide continuous voice, data and video services in cases of short-term disruptions.

The second report provides information on the transfer of vehicles with high mileage to the United Nations Logistics Base at Brindisi, Italy, and to other peacekeeping missions based on the operational requirements of the upcoming missions and the roadworthiness of the vehicles.

According to this document, financial regulation 5.14 (a) promulgates the following:  "Equipment in good condition that conforms to established standardization or is considered compatible with existing equipment will be redeployed to other peacekeeping operations or will be placed in reserve to form start-up kits for use by future missions".  Following this regulation, the Peacekeeping Department limits the transfer to the Logistics Base at Brindisi of transportation assets that have high value, and long-life items such as engineering equipment, airfield support equipment, fire-fighting equipment, heavy trucks, and mine-protected and armoured vehicles.  These vehicles are refurbished at the Logistics Base and transferred to other field operations at no cost to the receiving missions.  Transfer of light vehicles is undertaken on an exceptional basis in order to meet those immediate operational requirements that cannot be met from strategic deployment stocks or that cannot be met owing to procurement lead times.

The ACABQ report on the Support Account (document A/60/807) was presented by Mr. Abraszewski.

INGA-BRITT AHLENIUS, Under-Secretary-General for Internal Oversight Services, introduced several reports of that Office.  On the comprehensive management audit of the Peacekeeping Department, she noted that, while the Department had made some progress in recent years in improving the management of peacekeeping operations, those achievements had not kept pace with the challenges resulting from the rapid increase in field operations.  Also, there had been inadequate emphasis by management on establishing a high level of ethical behaviour and accountability.  The Oversight Office also stressed the importance of the United Nations Charter, which called for the necessity of securing the highest standards of efficiency, competence and integrity.  Management was responsible for the internal control in an organization.  The foundation of internal control was the so-called "control environment", which, according to modern concepts, entailed ethical culture and values, and a commitment to competence.  Only an effective system of internal control could ensure that rules were adhered to and objectives achieved. 

She said the OIOS was of the view that internal control in the Peacekeeping Department and the Department of Management needed to be significantly improved.  Of particular concern were the risks and exposures in the area of procurement, where there were a number of cases indicating systematic breaches of United Nations regulations and rules.  One of the root causes of the situation was the reluctance of management to hold staff members accountable for overall poor management and violations of rules and regulations, leading to an unacceptably high exposure to the risk of fraud and abuse.

She then introduced the OIOS report on the audit of the standard costs applied to Headquarters overhead.  The OIOS had found that, while budget estimates were generally based on standard cost guidelines, the Department of Management had not established a policy for maintaining and updating those guidelines, and the guidelines were not consistently applied in the budget process.  The guidelines for estimating standard costs needed to be realigned with actual costs incurred both for facilities and infrastructure, communications and information technology costs.  The audit estimated that adjustments recommended by the OIOS for the proposed support budget for the period 1 July 2005 to 30 June 2006 would have generated a net savings of $970,000.  The OIOS had issued 13 recommendations to strengthen the consistency of the process used to estimate Headquarters overhead costs.  The Oversight Office would continue to monitor the implementation of those recommendations.

Turning to the OIOS report on the global review of discipline in field missions led by the Peacekeeping  Department, she noted that the review showed that there was a need to establish a clear link between the United Nations standards of conduct, the Organization's core values and competences, and the United Nations Charter.  Overall, the shortcomings reflected in the report could be attributed to a number of inadequacies in leadership from Headquarters and field missions.  The Peacekeeping Department and the Office of Human Resources Management had not provided clear policies and procedures on discipline and guidance for missions' implementation.  In the report, the Oversight Office had issued 28 recommendations aimed at improving the state of discipline in peacekeeping and other field missions.  The Peacekeeping Department and the Office of Human Resources Management had already started to implement most of the recommendations and were working cooperatively towards developing various training programmes.

Introducing the OIOS report on the investigation conducted by the Investigations Task Force into fraud and corruption allegations at Pristina Airport, she said the findings in the report spoke for themselves in relaying the nature and extent of mismanagement of Pristina Airport.  It revealed a lack of accountability in the operation, management and supervision reaching the most senior levels of the Airport's administration.

In his response to the final draft of the report, the Secretary-General's Special Representative of UNMIK stated that it was outside OIOS jurisdiction to report to the Assembly on the results of the Task Force investigations, she said.   The Special Representative had also not addressed the OIOS recommendations in his response to the report, stating that he did not accept that the OIOS had a right to direct those recommendations to him, as they followed from the Office's participation in the Investigations Task Force.  Since then, she was pleased to see that UNMIK had now responded to all 11 recommendations submitted by the OIOS.  In the first week of May, two airport employees had been dismissed and five more warned as a direct result of the investigations.  The OIOS now looked forward to following up on the recommendations and evaluating the status of implementation.

PHILIP COOPER, Acting Director of the Administrative Support Division of the Department of Peacekeeping Operations, introduced the comments of the Secretary-General on the investigation into fraud and corruption allegations at Pristina Airport (document A/60/720/Add.1), which provides additional information on the investigations conducted by the Investigations Task Force, as well as details of the structural and management reforms undertaken and completed by UNMIK since 2003 to address issues of governance, fraud and corruption in publicly owned enterprises, including Pristina Airport.  It also contains information on the status of implementation of the recommendations made in the report of the OIOS.

According to the document, the governance of environment for enterprises such as the Pristina Airport is vastly different today from the situation pertaining in 2003 when the original Task Force investigations were conducted.  The significant reform initiatives instituted by UNMIK to improve governance of publicly owned enterprises offer real hope of reducing the opportunities for mismanagement, fraud and corruption in those enterprises.

Mr. DROFENIK (Austria), speaking on behalf of the European Union, noted that the budget proposal for the support account for 2006-2007 showed an almost 30-per cent increase to the previous year.  While understanding that the support account budget corresponded to a dramatic increase in peacekeeping operations, he would like to highlight the ACABQ observation that an analysis of the adequate level of backstopping capacity and the current arrangements had not taken place since the establishment of the support account in 1991.  The Union called upon the Secretariat to provide that long-overdue analysis. At the same time, he reiterated the Union's request for a review of the management structures of all peacekeeping operations, which should have been presented at the second resumed session.

The Union was aware that the support account needed to be examined in the light of reports to be introduced during the current session, he continued, in particular on procurement, audit and oversight, and the detailed report on investing in the United Nations.  The ACABQ recommended deferral of the resources directly related to those reports.  While understanding that logic, the Union reserved its right to come back to those relevant resource requests.

He also noted that non-post resources in the support account had substantially increased, in particular in the field of travel, consultants and information and communication technology.  That, to a certain extent, resulted from the transfer of resources from the mission budgets to the support account.  However, the Union still needed a deeper understanding and explanations of how those resource requests were being justified.  The Union welcomed the establishment of an Integrated Training Service Unit, which corresponded to the request of the ACABQ and the Assembly for transparency and coordination of all aspects of training, and the establishment of posts for a headquarters capacity for conduct and discipline.  He also welcomed increased capacity for the Best Practice Unit and the Police Division. The Union endorsed the ACABQ recommendation on the budget proposal for the Logistics Base and the establishment of a Training Delivery Cell and a Regional Aviation Safety Office.  Further development of the Logistics Base would contribute to the efficiency and effectiveness of peacekeeping. He took note with interest of the proposals of the Secretary-General for 2007-2008 and concurred with the ACABQ that all new structures needed to be fully justified and based on a cost-benefit analysis.

The OIOS audit on the management of the Peacekeeping Department was an important and thought-provoking report, he added.  While aware that some areas of that document were also subject to upcoming reports, he believed that the observations and recommendations of the OIOS deserved careful attention and extensive consideration.  The Union was looking forward to engaging very actively in the consultations on the report.  And finally, he expressed concern about the OIOS findings related to the Pristina Airport and asked the Secretariat to identify and apply lessons learned in that regard.

HITOSHI KOZAKI (Japan) noted that the proposed budgets of peacekeeping operations amounted to nearly $5 billion, not including expenses related to the future expansion of United Nations activities in Darfur.  Under the circumstances, the Government of Japan continued to scrutinize the budgets of the missions to see if they were fully justified and if the operations themselves were being managed in an efficient and accountable manner.  He was particularly concerned about reported cases of fraud and presumptive fraud.  His delegation would find it difficult to support the budgets before the Committee, unless convincing explanations were given as to all necessary measures being implemented to redress the recurrence of similar cases in the future, taking fully into account the points raised by the OIOS.

Member States' interest in better management of peacekeeping was reflected in resolution 59/296, he continued.  Careful consideration must be given to thematic management issues before individual mission budgets were approved.  It was necessary to carefully analyse the manner in which the guidance and recommendations contained in the resolution and the reports of the ACABQ and the Board of Auditors had been implemented, with a view to providing further guidance where it was necessary.

His Government attached great importance to the principle of budgetary discipline, he said.  With regard to such problem areas as procurement practices and sexual exploitation and abuse, it was necessary to see clear evidence of improvement of management practices in the Secretariat, with strong emphasis on the strengthened accountability mechanism.  Without that, his Government would not be fully accountable to its taxpayers for the approval of budgets of peacekeeping operations.

Regarding new proposals with policy and financial implications, including "Peace operations 2010", he said that they needed to be carefully examined by Member States.  Efficiency and effectiveness of the management process should be reviewed before additional resources were requested.  His delegation attached importance to more realistic budgeting based on realistic assessment of requirements, as well as the opportunity for gains in efficiency and savings.  It was most regrettable that the Secretary-General was not yet in a position to present his view on the management structure of peacekeeping operations.  And, he was not convinced that proposed new initiatives would lead to improvements, unless management structure was analysed clearly and comprehensively.  He noted that the ACABQ recommendation to create a "management committee" for good governance, accountability and implementation of oversight recommendations had not been followed by the Department.

On the procurement reform, he said that the OIOS had pointed out the lack of care and involvement of senior management, the absence of internal controls and the lack of basic knowledge of procurement procedures by field procurement officers, as well as overestimates of procurement requirements.  He took note with grave concern of the comment that inaccurate forecasting of requirements exposed the Organization to risks of collusion with vendors, theft or other irregular activities.  He was also concerned about the instances of unexplained non-compliance with manuals, guidelines and regulations, as well as an increase in fraud and presumptive fraud. Immediate action needed to be taken to prevent future cases of non-compliance, and the Peacekeeping Department should carefully analyse the elements leading to the reported fraud and take punitive measures, learn from its experience, and share the lessons it learns with other missions.  If there was little attention and oversight by senior management, as reported by the OIOS, providing new resources as requested would not necessarily resolve problems.  Establishment of a strong accountability mechanism, including clear delegation of authority, was essential in that regard.

In the spirit of zero tolerance for sexual exploitation in peacekeeping and for improper procurement practices, no effort should be spared to address systematic weakness.  A clear explanation must be given as to the policy framework and the manner in which existing resources were to be utilized, whenever additional resources were requested.

Despite the fact that all recently established missions were complex and integrated ones, there had been neither explanation of their administrative and budgetary aspects, no enough discussions in the Assembly.  His delegation had previously posed questions on the matter, and the comment of the Board of Auditors on the absence of a formal definition of the integrated mission concept reinforced his concerns.  There had also been insufficient strategic guidance and support from Headquarters in the integrated mission planning process of UNMIS.  The Administration should formalize the concept of integrated mission partnership, determine their function, structure and role and finalize the principles, policies and guidelines to govern them.

One of the reports referred to a situation where missions had been compelled to provide air transport support to local interlocutors and international counterparts engaged in activities relating to disarmament, demobilization and reintegration, humanitarian assistance, elections and other civic activities, he said.  That raised questions as to how the resources of the missions were utilized vis-à-vis other entities in the field and how such usage was recorded and reported.  He would like to learn more about the Peacekeeping Department's policy on the authorization of flights for "other tasks".  Integrated missions should not be utilized as a mechanism for financing activities of United Nations entities from assessed contributions.

He supported further promotion of inter-mission cooperation as it contributed to effective use of resources, he added.  Regional coordination plans should be implemented among missions in the same region.  The Administration had cautioned about producing "plans" in that regard, due to limitation of resource-sharing and operational priorities, and he wanted to receive further clarification regarding those views.  He endorsed the recommendation of the ACABQ that the Board of Auditors be requested to analyse the management of post- and non-post resources for the support account.  His delegation also attached importance to the follow-up on the implementation of the Board's recommendations and found the view of the OIOS on the information and communication technology appropriate and useful.

RAZIFF ALJUNIED (Singapore) said the OIOS report seemed to suggest that the control environments in both the Department of Peacekeeping Operations and the Department of Management were weak.  There was clearly a need to improve the management of peacekeeping operations by strengthening internal controls and ensuring that established controls were enforced.  According to the OIOS report, there was a lack of systematic planning in the Peacekeeping Department.  There had also been an inadequate emphasis on establishing a high level of ethical behaviour and accountability, leading to a culture of impunity.  Such serious findings needed to be quickly addressed.  To assist Member States, he suggested that the Oversight Office prepare a comprehensive table indicating the problem areas and the status of implementation of OIOS recommendations by the Peacekeeping Department and the Management Department.  Reasons for non-compliance should also be given.  It would also be important for the OIOS to inform the Committee whether its recommendations had been implemented in the field, as it would not only promote transparency, but also provide Member States with the opportunity to understand the challenges faced by the two departments.

He said he understood that the section on procurement in the report (document A/60/717) built upon two earlier OIOS reports and the more extensive OIOS report on management audit of the Peacekeeping Department.  The latter report had been used as a basis to place eight United Nations staff on administrative leave pending further OIOS investigations.  The conclusions of that report had been dire.  Numbers as high as $300 million overall had been cited by the OIOS.  At that time, Mark Malloch Brown, speaking in his former capacity as Chef de Cabinet, had raised concerns over the methodology used by the OIOS to arrive at its conclusions.

He said his delegation had learned about yet another major shortcoming of the OIOS report on procurement, namely that the OIOS was unaware about the delegation of procurement authority by the Department of Management to the Peacekeeping Department, when they had prepared their report.  That meant that senior peacekeeping staff had been delegated authority to conduct procurement activities in the field up to a predetermined value of $2 million, without seeking approval from the Department of Management.  The initial OIOS investigations with the Peacekeeping Department had not revealed the existence of "delegation of authority" by the Department of Management to the Peacekeeping Department.  The fact that "delegation of authority" did exist only came to light much later after the completion of the OIOS report on the management audit of peacekeeping operations.

Turning to paragraphs 20 and 21 of the OIOS report (document A/60/717), he noted a serious shortage of staff in the Procurement Section, and, as a result, critical tasks and operational procedures had been overlooked.  He wanted to know why that had been the case.  The Department of Management had responded that staffing in the Procurement Section depended on the approval of posts under the support account for peacekeeping operations.  However, it was on record that several requests for additional staff by procurement had been rejected by senior management even before the staffing proposals had been submitted to the Assembly.  The decision to deny the additional requests for staff was "certainly absurd", as procurement had fewer staff in 2005, when it had handled over $1 billion in procurement volume, as compared to the mid-1990s when procurement volume was around $300 million.  Even worse, the Section was now made to account for deficiencies when the potential problem had already been identified, but no action had been taken due to a lack of understanding of the situation confronting the Section by the Under-Secretary-General for Management.  In that regard, was OIOS aware of that?  If so, what action was recommended against senior management for that oversight? he asked.

Another issue of concern was the pervasive practice of United Nations senior officials commissioning audit studies on procurement activities by consultants such as DeLoitte and Touche, he said.  Why had that study been commissioned by the Under-Secretary-General for Management, particularly without authorization from Member States?  He understood that the United Nations had paid $500,000 to DeLoitte for the report, the value and findings of which were highly dubious.  As far as he knew, the ACABQ, the Procurement Section and the OIOS had not been given an opportunity to provide their views on the report.  On the contrary, there had been a hurried and cursory presentation of the report by the Under-Secretary-General for Management on the same morning when the equally important issue of Management and Secretariat reform was being debated in another conference room.  It was not surprising that many Member States could not attend the Under-Secretary-General's briefing.  Whether that was deliberate or just plain unfortunate was anyone's guess.  In any case, the Under-Secretary-General had used the report to paint the United Nations in a negative light, as an organization where corruption was rife and fraud pervasive.

What had been ignored was the fact that several reports prior to the DeLoitte report had, in fact, either not unearthed any wrongdoing within the Procurement Section or maintained that the system used by the Section was in line with a "standard public purchasing process with some variants".  That was the finding, for example, of the National Institute for Governmental Purchasing, a non-profit organization.  It was also worth bearing in mind the many procurement-related audits of the Procurement Section by the OIOS and external auditors.  There had been some 47 such audits in 2004.  It would be interesting to know if OIOS auditors had previously highlighted such fundamental weaknesses which DeLoitte had identified.

He noted that the forensic audit on procurement that was supposed to have been undertaken by DeLoitte, commissioned by the Under-Secretary-General for Management, would now not take place.  It was good that common sense had prevailed.  Management reform was a serious enterprise.  Simply commissioning reports, coupled with releasing them to the media with no discussion or clarification, undermined the exercise and the credibility of all involved.  It also made one wonder about the motives of those commissioning such reports. 

It had been more than five months since the United Nations had announced that it was placing eight of its staff on administrative leave to facilitate the ongoing audit and investigation into the Organization's procurement activities, he said.  Despite the human and financial resources that had been thrown into the investigation, it seemed odd that not a shred of evidence had been adduced to substantiate the alleged "pervasive corruption" in the United Nations and "substantial evidence of abuse in procurement".  The only logical conclusion one could draw was that there was either nothing to be found, or that the entire army of internal and other investigators were grossly incompetent.  If the system was as flawed as the media had been led to believe by the Under-Secretary-General for Management and some major contributors, it would have been highly irresponsible for management to maintain the same procurement system to the current day.  But, as far as he knew, day-to-day procurement was still being carried out by the same personnel who had been in the Procurement Service for many years, using basically the same system that had been used for the past several years.

He said it was unfortunate that the current Administration had allowed some of its Under-Secretaries-General to pursue their personal agenda and, in the process, allowed them to tarnish the United Nations image.  By allowing senior management to create a myth of pervasive corruption in the United Nations, the Administration had perhaps unwittingly encouraged some Member States to believe in that myth.  Who would be held accountable for the costs of the investigations in the event no corruption was found, which appeared to be the case so far? he asked.  Who would be held responsible for the damage done to the United Nations reputation and image?  The issues he had highlighted boiled down to the very heart of management reform and it was important that those issues were urgently addressed.  Any reform in the United Nations must be carried out for the right reasons and with the desire to strengthen the United Nations for the collective good of its membership.

Mr. SACH, the Controller, then introduced the Secretary-General's reports on the financial performance and/or budgets of individual peacekeeping missions. 

Mr. ABRASZEWSKI, of the ACQBQ, introduced that body's related report.

YASSAR DIAB (Syria) addressed the reports on the financing of UNDOF, which had been created by the Security Council over 30 years ago. The need to create and continue the activities of the Force resulted from continued Israeli occupation of the Syrian Golan and its disregard for relevant Security Council resolutions. Therefore, the funding of the Force must be borne by the aggressive Occupying Power.  Ever since the Force had been formed, his country had respected the Disengagement Agreement and looked forward to a just and comprehensive solution on the basis of all relevant resolutions and Israel's return to its pre-1967 borders. Syria had always respected the noble work of the staff of the mission.  He also praised the cooperation between UNDOF and relevant Syrian authorities and saluted the countries that had contributed to the mission.

On other matters, YASSER ELNAGGAR (Egypt) said that on 16 May, there had been an announcement by the Secretary-General on the appointment of Carolyn McAskie from Canada as Assistant Secretary-General for Peacebuilding Support. While he had no problem with the candidacy, he wanted to understand how the appointment actually fulfilled the provisions of the Assembly resolution that was only two weeks old, and in which the Assembly had not established any posts.

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