VZCZCXYZ0026
RR RUEHWEB

DE RUCNDT #1099/01 3341935
ZNR UUUUU ZZH
R 301935Z NOV 07
FM USMISSION USUN NEW YORK
TO SECSTATE WASHDC 3230

UNCLAS USUN NEW YORK 001099 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: AORC PREL UNGA
SUBJECT: UNGA/C-5: AUDIT REPORTS ON UNOPS AND UNHCR 
TROUBLING 
 
¶1. (U) The UN General Assembly Fifth Committee met in formal 
session on October 10 to hear introduction of several 
financial audit reports (A/62/5/Add.5, A/61/5/Add.10, 
A/62/120, A/61/214/Add.2, A/61/350/Add.1 and A/62/355). 
Introduction of the OIOS Annual Report will be reported 
septel. Director of External Audit of France and Chairman of 
the Audit Operations Committee of the Board of Auditors 
(Board) Bernard Levallois and Jonathan Childerley, Chief of 
the Oversight Support Unit, Department of Management, 
introduced their reports on implementation of Board 
recommendations for the 2004-2005 biennium, summarizing the 
measures being taken to ensure that UNOPS remains productive 
over the long term. Report Addendum (A/61/214/Add.2) breaks 
down the recommendations by status, target dates, and the 
designation of the official responsible for implementation. 
Childerley stated that UNOPS would soon be releasing an 
updated status of implementation in a new version of the 
Addendum. The Board reports also illuminated the troubled 
financial situations of the UN Office for Project Services 
(UNOPS) and UN High Commissioner for Refugees (UNHCR). In 
particular, Levallois highlighted the issue of unliquidated 
obligations at UNHCR as an issue of concern to donors. 
 
¶2. (U) In introducing the ACABQ's reports (A/61/350/Add.1 and 
A/62/355) on the Board's work, ACABQ Chairman Rajat Saha 
emphasized that the Advisory Committee is engaging in ongoing 
discussions with UNOPS regarding implementation of 
recommendations in the context of the budget. He pointed out 
UNOPS's low rate of implementation of recommendations 
pertaining to procurement, contract management, and fraud 
prevention. Saha also highlighted the problem of staff 
members being in-between assignments who were granted leave 
with full pay increasing dramatically to 88 individuals in 
2005-2006. 
 
¶3. (U) Few Member States commented on this series of reports. 
Pakistan spoke on behalf of the Group of 77 and China; 
Portugal intervened on behalf of the European Union. Member 
States were encouraged by the improvement of overall 
implementation of recommendations over the last several 
biennium. However, they expressed concern regarding the slow 
or non-implementation of recommendations that are quite a few 
years overdue. The G-77 and China were particularly concerned 
by the gap between income and expenses at UNHCR as a result 
of the decrease in the amount of voluntary contributions, and 
called upon the High Commissioner to increase his efforts to 
raise voluntary contributions. 
 
¶4. (U) USUN/MR stated our concerns regarding the low 
implementation rate in areas of human resources management, 
treasure and investment accounts management, interagency 
services, and information and communications technology 
systems. We commented on the troubling reports of UNOPS 
finances, and called for careful consideration during 
informal consultations of the ongoing risks posed to 
departments and offices involved with UNOPS-implemented 
projects. With regard to UNHCR, we also noted the gap between 
expenditures and income, and shared the ACABQ's view about 
the questionable sustainability of UNHCR's improved financial 
situation if it continues to be based on short-term remedies. 
We echoed Chairman Saha's concerns regarding UNHCR paying for 
88 staff members who were between assignments and thus not 
actually working. We also noted the gap that exists in 
UNHCR's current conflict-of-interest policies, calling for 
the SYG to extend the jurisdiction of the UN Ethics Office 
and the policies it oversees through 
hout the UN system. 
 
¶5. (U) U.S. Statement - 
 
The United States Delegation would like to thank Mr. Bernard 
Levallois, Director of External Audit of France and Chairman 
of the Audit Operations Committee of the Board of Auditors 
and his colleagues for preparing and presenting their reports 
to the Fifth Committee. I would also like to convey our 
appreciation to all the auditors and evaluators whose efforts 
contributed to the compilation of these helpful documents. In 
addition, the U.S. Delegation would like to thank Mr. Rajat 
Saha, Chairman of the ACABQ, for introducing his Committee's 
report on the Board's work. 
 
The United States Delegation has carefully reviewed the 
reports prepared by the Board of Auditors, including the 
report on the implementation of the Board's recommendations 
concerning the biennium 2004-2005. As is the case with the 
recommendations of the other UN oversight bodies, the 
recommendations of the UN Board of Auditors will improve the 
efficiency and effectiveness of the UN only if they are fully 
implemented by management. In this regard, the United States 
Delegation notes that while only 52 per cent of the Board's 
recommendations for the biennium 2004-2005 have been fully 
implemented, an additional 43 per cent are under 
implementation. Taking into account that the number of 
 
 
recommendations made by the Board has more than tripled over 
the past four biennia, we welcome the fact that the rate of 
implementation of the Board's recommendations as of March 31 
of this year has improved compared to the situation in May 
¶2005. 
 
Despite this progress, certain trends involving 
implementation of the Board's recommendations raise concerns, 
such as the low implementation rate in the areas of human 
resources management, treasury and investment accounts 
management, interagency services, and information and 
communications technology systems. The United States hopes to 
learn more from UN management about steps that are being 
taken to expedite completion of the Board's recommendations. 
Since the Secretary-General has entrusted the Management 
Committee with the overall responsibility for ensuring that 
program managers are effectively implementing recommendations 
in a timely manner, the United States would like to know when 
and how often the Management Committee has met during the 
present calendar year of 2007 to discuss oversight matters. 
 
The United States commends the Board of Auditors for 
identifying those areas for each organization reviewed where 
the implementation rate of the Board's recommendations has 
been relatively low. For example, in the case of the UN 
Development Program (UNDP), the Board noted that only half 
its recommendations related to internal oversight have been 
implemented.  Internal oversight and external oversight 
together provide valuable assurance and monitoring to the 
UNDP Administrator, the Executive Board, and donors 
concerning the use of resources and the effectiveness of 
ongoing operations. For this reason, it is crucial that UNDP 
expedite completion of the Board's remaining recommendations 
related to internal oversight. 
 
Similarly, the board identified five areas involving low 
implementation rates in the work of the UN Relief and Works 
Agency for Palestine Refugees in the Near East (UNRWA), 
including: procurement and contract management, human 
resources management, results-based management, program and 
project management, and information and communications 
technology. The fact that UNRWA has only implemented 26 per 
cent of the Board's recommendations for 2004-2005 is a matter 
of concern and warrants an explanation. The United States 
urges UNRWA to provide information to this Committee 
concerning the low implementation rate of the Board's 
recommendations and hopes that all open recommendations will 
be addressed expeditiously. 
 
The United States also has reviewed the Board of Auditor 
reports and corresponding comments by the Advisory Committee 
on Administrative and Budgetary Questions (ACABQ) on the 
financial statements of the UN Office for Project Services 
(UNOPS) for the biennium ending December 31, 2005, and the 
financial reports and audited financial statements of the 
United Nations High Commissioner for Refugees (UNHCR). 
 
Concerning the deeply troubling situation involving UNOPS, 
the United States paid careful attention to the observation 
of the ACABQ that the Board's report on the financial 
statements for the biennium 2004-2005 was "unprecedented in 
the scope of issues of qualification." The fact that the 
ACABQ shares the Board's ongoing concerns regarding the 
sustainability of UNOPS and the ongoing risks posed to 
departments and offices involved with UNOPS-implemented 
projects merits our careful consideration during informal 
consultations on this agenda item. 
 
Although the financial situation of the UN High Commissioner 
for Refugees was reported by the Board to be far less dire 
than the circumstances involving UNOPS, the United States 
remains concerned by the decrease of $24 million in voluntary 
contributions from 2005 to 2006 and the continued gap between 
expenditures and income. We commend UNHCR for reducing its 
expenditures in 2006 by more than $40 million, but share the 
Board's view about the questionable sustainability of UNHCR's 
improved financial situation if it continues to be based on 
short-term remedies, such as the currency exchange gain of 
$23.7 million that UNHCR enjoyed in 2006. The attention of 
the United States Delegation also was drawn to the ongoing 
costs incurred by UNHCR for paying 88 staff members who were 
between assignments, and thus not attached to any office or 
actually working. We note that the ACABQ agreed with the 
Board's recommendation that this matter be addressed 
urgently. The United States also shares the concern expressed 
by the ACABQ and the Board regarding the low rates of 
compliance by UNHCR with minimum security standards, 
especially in Phase III locations and above, and the gap that 
exists in UNHCR's current conflict-of-interest policies. This 
latter point underscores the immediate need for the 
Secretary-General to extend the jurisdiction of the UN Ethics 
 
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Office and the policies it oversees throughout the UN system. 
 
 
Mr. Chairman, thank you for permitting me an opportunity to 
convey the views of my delegation regarding the Board of 
Auditors' various reports. We again thank the Board for their 
important contribution to the overall successful functioning 
of the Organization, and look forward to more detailed 
discussion of a number of these matters during informal 
consultations. 
 
Khalilzad