This record is a partial extract of the original cable. The full text of the original cable is not available.

241015Z Oct 05

UNCLAS SECTION 01 OF 04 PARIS 007244 
 
SIPDIS 
 
FROM USMISSION UNESCO PARIS 
FOR IO/T, IO/S, L/UNA 
 
E.O. 12958:     N/A 
TAGS: ABUD FR UNESCO
SUBJECT:  USUNESCO: 172ND EXECUTIVE BOARD REPORT ON F&A 
COMMISSION 
 
 
¶1.  There was no controversy surround in the work of 
the F&A Commission at the 172nd UNESCO Executive Board. 
Agenda items 4, 6, 12, 34, 41, 49, and 53 items were 
requested to be forwarded to the PX Commission with no 
discussion in F&A.  Of these USDel requested that Item 
6 be discussed. 
 
¶2.  Agenda Item 39: The U.S. Delegation made comments 
on our two areas of concern, the slow progress in 
developing in-house facility management expertise and 
the continuing problems with managing and monitoring 
their extrabudgetary program.  The Italian delegation 
also raised concern with facilities management and 
questioned the issue with support costs for 
extrabudgetary programs.  Other Dels raised a variety 
of questions.  The Secretariat representative responded 
to the questions on the extrabudgetary programs by 
discussing the efforts of the Working Group that has 
been established.  She also acknowledged that there is 
a problem with the management and implementation of 
these programs but that they are making an effort to 
improve and asked for the Board's patience in this 
area; that full progress would be presented by next 
Spring.  She attributed much of the problem to poor 
planning for these projects, lack of personnel or 
expertise and an insufficient execution plan.  She said 
a report on support costs for extrabudgetary projects 
would be completed 2 November and that the table for 
implementation and accountability is being completed. 
On facility management, the Secretariat stated that IOS 
is looking at issues such as an inadequate inventory on 
non-expendable equipment.  He also said that they rely 
heavily on interagency solutions for some facility 
issues.  Decision adopted noting the status of these 
items and requesting the D-G to forward to GC with EB 
comments. 
 
¶3. Agenda Item 33:  USDel raised concern with the 
action requested under this agenda item and asked 
whether it necessitated the suspension of Fin Reg 
4.3/4.4.  U.S. Del also questioned why this practice 
persists and urged the Secretariat to discontinue it. 
This generated much discussion from the other Dels. 
Japan also questioned the applicability of the time 
limit in the Fin Regs.  Russia backed this up by asking 
if this Reg doesn't apply, what does govern?  The 
Secretariat replied that Fin Reg 4.3 does govern but 
 
SIPDIS 
that the time limit does not apply to those items 
addressed by the phrase "other legal obligations". 
These are not subject to the 12-month period because 
this phrase is intended to capture unforeseen legal 
obligations that cannot be executed within a time 
limit.  Japan acknowledged this, but asked whether the 
items being requested truly were unforeseen legal 
obligations.  Legal Council offered some explanation 
for this and for some of the expenses it was 
reasonable-but for others such as over-expenditures in 
field offices, the Board agreed these were poor 
management/internal controls and not unforeseen legal 
obligations.  The Board then turned to the draft 
decision.  The U.S. questioned that if this action is 
governed and allowable by the Fin Regs why does the 
decision need to contain language that the Board 
"approves" it.  It seemed the Secretariat is just 
trying to "legitimize" the practice as it has in the 
past (though we didn't say this).  Canada backed this 
up.  Dels urged that there not be a continued balance 
in ULOs and that this practice if used in the future be 
limited to truly unforeseen legal obligations (i.e. law 
suits).  After lengthy discussion on the language, 
acceptable changes were made to the draft decision and 
it was adopted.  There was not any language 
"approving", just "noting", and added language urging 
the Secretariat to discontinue this practice to the 
greatest extent possible. 
 
¶4. Agenda Item 35:  U.S. Del made a statement that we 
do not support external borrowing, cannot pay interest 
on it due to U.S. domestic law, and have not seen any 
evidence that it is needed based on the Organization's 
cash position and WCF.  UK also indicated they do not 
support external borrowing.  Many other Dels spoke 
about urging non-payers to pay and implementing 
stricter penalties besides losing a vote, especially 
for those not in compliance with payment plans.  It was 
decided this was a matter of changing the Constitution 
and not really for action under this agenda item.  Many 
Dels did not want to see UNESCO implement external 
borrowing but raised the point that if it did, interest 
should only be paid by non-payers for the year where 
the borrowing was necessary.  Otherwise, they felt, 
payers were penalized and had to pay interest when they 
had paid on time.  External borrowing authority will 
ultimately be taken up at the GC, and we need to be 
prepared to try to stop approval of this authority and 
if necessary, to respond to the question of only non- 
payers paying interest.  Most Dels did not have as 
strong a position as we did on this.  The Secretariat 
representative gave what was essentially a lecture 
(note:  we felt this was largely directed at the U.S.) 
that many Member assessments are not paid on time and 
to couple that with denying the authority for external 
borrowing was constraining and tied their hands.  He 
said it leaves them no safety net and makes managing 
the organization and cash flow too risky.  Japan stated 
that it may be necessary to allow such a safety net in 
this context.  The draft decision was adopted; it 
contains no language on external borrowing. 
 
¶4. Agenda Item 3: There was little discussion on this 
item and the draft decision was adopted with no 
changes. 
 
¶5. Agenda Item 21: USDel stated that we are not 
supportive of this approach overall but we did not 
block consensus on it.  We indicated that we think 
these costs should be included in the regular budget 
and the organization must continue to prioritize to 
achieve this.  We asked some questions with regard to 
the operation and management of the Special Account and 
stated there should be no indicative minimum.  Iceland 
pushed for further prioritization and the need to 
identify programs that could be ended.  France also 
stated that they did not like the approach in that they 
did not think it was acceptable to rely on voluntary 
contributions for priority programs.  Japan stated that 
they too felt it was not a good answer but it was a 
compromise they could accept given the discussions of 
the last EB.  The UK said they would accept it but 
didn't like it because they do not feel the $610 budget 
represents a re-ordering of priorities, which is what 
was asked for by the last EB.  They added that if 
UNESCO can only get governments to agree to fund 
priority programs through voluntary contributions, it 
should be a warning sign to the Organization.  Germany 
also came out against the approach of a Special Account 
but will accept it.  Brazil stated they are generally 
pleased with the efforts of the Secretariat and the 
results.  The Secretariat responded to questions.  The 
programs funded by the Special Account are already 
ongoing, supported by the Regular Budget so they say 
there will be no major disruption created when the 
Special Account is ended.  The Special Account will 
function in accordance with the Fin Regs and there is 
no indicative minimum-it is optional.  They also stated 
that when they try to pinpoint activities to end, some 
Member States always object so they need support in 
this area.  The Board turned to the language of the 
draft decision and revisions were made.  33C/6 was 
included in the language, which includes points and 
decisions made at the previous EB.  "Welcomes" and 
"Welcomes equally" were deleted.  France tried to add 
some language stating that we recognized the risks 
being taken by funding regular program activities with 
voluntary contributions, but the U.S. and UK disagreed 
with its inclusion and after discussion it was 
eventually withdrawn. 
 
¶6. Agenda Items 13, 14, 15, 16, and 61 and 50, 60, and 
7 were clustered for discussion purposes.  U.S. Del 
raised points regarding the need for a more strategic 
approach to Category II centers in the future, and that 
we would like to see a strategic analysis of these 
centers.  Dels with specific interests in the Centers 
discussed their benefits.  Iceland raised the concern 
that the creation of too many centers was diverting 
resources away from UNESCO priorities.  Other Dels 
supported this and raised points on the feasibility 
studies being done.  The Secretariat stated that these 
Centers are not proposed by them but by inter- 
governmental groups or Members and that a feasibility 
study is done for each one over a period of 
time-they're not entered into lightly.  They also 
stated that the Centers are very cost effective and 
cost benefit analyses on them would prove favorable. 
The intergovernmental groups such as IHP regularly 
evaluate them.  He believes they can present a better 
overall strategic analysis and report on them after 
these centers have been operating for some period of 
time.  He took note that the Member States believe this 
is required and agrees with it.  Draft decisions were 
adopted with minor language revisions. 
 
¶7. Agenda Item 49: A report was issued by the D-G 
following the meeting of Experts recommending delaying 
a decision until the next Executive Board.  A 
Feasibility Study had not been done yet.  Canada 
suggested that because it was a policy decision, it 
should be delayed until the 34th GC.  U.S. Del 
supported this, adding the benefit of reviewing it in 
the context of the entire program for the next 
biennium.  Japan supported this position as well.  The 
decision was adopted in line with this view. 
 
¶8. Agenda Item 56:  Many Dels spoke in support of this 
item.  The decision was adopted with no changes. 
 
¶9. Agenda Item 11:  Many Dels spoke in support of this 
item.  U.S. Del had instructions not to be the first to 
raise issues with the proposed visits to China for 
literacy award winners and to only follow on in support 
of comments made by Korea (which is not on the 
Executive Board) or presumably if another Del had 
raised.  No other Dels raised any objections or issues. 
The decision was adopted with no changes. 
 
¶10.  Agenda Item 10: U.S. Del made comments with regard 
to our support of the Decade and the Implementation 
scheme, and indicated that UNESCO should provide 
leadership in this area within existing resources. 
U.S. Del suggested two changes to the draft decision. 
Both were agreed to and the decision was adopted. 
There was little discussion overall. 
 
¶11.  Agenda Item 59: Many Dels spoke in support of 
this.  U.S. Del expressed concern with establishing the 
Committee at this time.  UK suggested that language 
needed to be included in the statutes reflecting that 
the Committee and its work should be reviewed at some 
interval.  Canada proposed the size of the Committee 
needed to be evaluated and possibly reduced.  A Working 
Group was created to amend the statutes, which was 
successfully done. The decision was adopted based on 
the amended statutes, which cut the size of the 
Committee from the present 44 to "up to 20" and include 
a sunset provision, reportedly a first in UNESCO. 
Authorization for the Commission will expire in four 
years.  A comprehensive evaluation will be performed 
and presented to the Executive Board in Spring 2009, 
which will issue a recommendation to the General 
Conference as to whether to renew the Charter. 
 
¶12.  Agenda Item 6: U.S. Del made comments that at a 
time when UNESCO is not on track for meeting EFA goals, 
it needs to focus on urgent education issues and not 
divert resources to marginal initiatives, and that it 
should not seek to allocate funds to a normative 
instrument when they would be better spent on 
priorities.  UK endorsed our position.  Czech Republic 
also supported.  Canada asked for the exact allocation 
of funds for this activity.  The Secretariat responded 
that there is $50,000 allocated to the development of 
the Charter-which everyone agreed was not realistic. 
There was also discussion on how we need to consider 
the recommendations of MINEPS.  The Legal Advisor 
responded that there is no legal obligation, just 
advisory.  There was discussion as to the appropriate 
way to deal with normative instruments between the PX 
and F&A committees.  There was much discussion on the 
language of the draft decision.  U.S. Del proposed 
deleting paragraph 3.  UK supported.  Bangladesh 
suggested adding language to this paragraph instead. 
France and Italy suggested this paragraph should be 
decided by PX.  This was eventually agreed to after 
much debate.  We tried to change the language in 
paragraph 5 to "Taking note" instead of "expresses its 
gratitude".  This eventually ended the same as the 
discussion for paragraph 3.  U.S. Del worked with 
Canada on new proposed language for paragraphs 6 and 7. 
After lengthy debate and suggestions from other Dels, 
the draft decision was adopted with the new language. 
 
¶13. Agenda Item 37: U.S. Del acknowledged progress made 
in this area, encouraged it continues and indicated our 
concern with the geographic representation formula. 
Other Dels praised the report and the progress that's 
been made.  There was some language added to the draft 
decision urging the Secretariat to continue making 
progress in this area and the decision was adopted. 
 
¶14. Agenda Item 38: U.S. Del raised questions with the 
cost estimate for the subcontract and stated our 
objection to carrying forward the surplus to cover this 
recurring operating cost.  Russia agreed with these 
concerns and asked for some comparison with other UN 
agencies.  Japan stated that they also do not agree 
with this practice, however, they are willing to accept 
it (reluctantly) and if it's an "exception".  UK, 
Germany and Brazil echoed same position as Japan-no one 
liked it but was willing to accept it.  The U.S. was 
isolated in our objection to this.  In drafting the 
decision language, some changes were added to emphasize 
that it was an "exception" or "one time" thing. 
(Comment:  We think these inserts were fairly 
meaningless overall but are somewhat of an improvement 
over approving it with no comment.) 
 
¶15.  Agenda Item 40:  This item generated much 
discussion from a variety of Dels mostly with regard to 
the relationship between the Executive Board and the HQ 
Committee, the history of developing the HQ Committee 
as a subsidiary body to the GC instead of the EB, etc. 
There was also clarification requested with regard to 
how the Starck project would be funded and what role 
the EB had in approving work or funds for these 
projects.  The Legal Advisor finally gave a clear 
response to this by referring to Fin Reg 7.3.  There 
was a very lengthy discussion on one of the paragraphs 
of the draft decision; modifications were eventually 
agreed to ensuring that the HQ Cmte consider Fin Reg 
7.3 and asking them to look into other possible 
alternatives for the Starck project other than that 
already proposed.  It was adopted as amended. 
 
OLIVER