VZCZCXYZ0035
PP RUEHWEB

DE RUCNDT #1459/01 2141940
ZNR UUUUU ZZH
P 021940Z AUG 06
FM USMISSION USUN NEW YORK
TO RUEHC/SECSTATE WASHDC PRIORITY 9739
INFO RUEHXX/GENEVA IO MISSIONS COLLECTIVE PRIORITY

UNCLAS USUN NEW YORK 001459 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: AORC ASIG KUNR UNGA
SUBJECT: UN REFORM: GAO TEAM ASSESSES PROGRESS 
 
 
¶1.    SUMMARY: A four-member GAO team (Government 
Accountability Office, International Affairs and Trade 
Section) already engaged in an ongoing analysis of UN reform 
efforts visited New York July 17-19 to assess progress to 
date on management reform and mandate review initiatives. 
They met with a wide array of Secretariat Officials and 5th 
Committee delegates, accompanied by USUN experts, and also 
met with USUN management reform staff. 
 
The meetings focused on three elements: 
 
-- Oversight and Governance: Upcoming Price-Waterhouse-Cooper 
(PWC) report on OIOS; efforts to establish OIOS operational 
and budgetary independence; 
 
-- Management Reform: effectiveness of U.S. strategy, 
including the budget cap; 5th Committee dynamics; ongoing 
debate between G-77 vs. developed states; G-77,s "threat of 
vote"; and 
 
-- Lack of Progress on Mandate Review 
 
---------------------- 
THE GAO TEAM 
---------------------- 
 
¶2. The GAO team members participating in the trip were 
Assistant Director Phil Thomas, Analyst-in-Charge Jeanette 
Espinola, and Senior Analysts Stephanie Robinson and Barbara 
Shields. 
 
--------------------------------------------- ------- 
UN OVERSIGHT AND GOVERNANCE 
--------------------------------------------- ------- 
 
¶3. The general feedback from Secretariat officials was 
decidedly mixed. OIOS U/SYG Ahlenius complained that draft 
versions of the PWC report she had seen contained 
"fallacious" assumptions and misdirected recommendations. She 
blamed the report,s inadequacies on a biased Steering 
Committee, accusing its members of having "highjacked" the 
report in early May. OIOS Chief of Office Uren Pillay noted 
the result, including the proposed transfer of several key 
OIOS functions to other UN offices and departments, weakened, 
rather than strengthened, the operational function of OIOS, 
thereby possibly jeopardizing the future effectiveness of the 
office. In particular, Ahlenius and Pillay warned about the 
inappropriate conflict of interest that would ensue should 
OIOS, Investigative Division (ID) be moved to the UN Office 
of Legal Affairs as recommended in the PWC report. 
 
¶4. Adrian Hills of the Office of D/SYG Malloch Brown (and a 
former OIOS auditor) noted that OIOS has a credibility 
problem and is hampered by a lack of sufficient resources. 
Hills agreed that taking functions, such as investigations, 
away from OIOS was not the best way to strengthen OIOS. 
UN/SYG for Management Chris Burnham discounted the PWC 
report, labeling it "dead on arrival." He de-emphasized the 
relevance of the anticipated PWC recommendations, suggesting 
calls for OIOS, dismemberment, for example, would be deemed 
unacceptable by key Member States, including the U.S. 
 
----------------------------------- 
MANAGEMENT REFORM 
----------------------------------- 
 
¶5. The GAO team,s meeting with U/SYG Burnham served to 
highlight previous accomplishments such as the Ethics Office, 
Whistle Blower Protection policy, Financial Disclosure and 
establishment "in principle" of an independent audit advisory 
committee (IAAC); each of which Burnham maintained was a 
positive indication of management reform. Burnham also cited 
the General Assembly,s recent adoption of a resolution 
(A/RES/60/283) supporting UN implementation of international 
public sector accounting standards (IPSAS), development of a 
new resource planning system (ERP), and creation of a new 
post of Chief Information Technology Officer (CITO) as 
further proof that UN management reform was proceeding, 
albeit at a slow pace. Burnham credited the budget cap as a 
driving force in attaining progress on management reform, but 
he acknowledged more needed to be done. 
 
¶6. Adrian Hills expressed a more mixed impression of 
management reform. He stated that the language embodied in 
recent resolutions was significantly watered down from the 
SG's proposals.  He added, however, that important advances 
had still been made, such as granting greater budgetary 
discretion to the Secretary-General, the establishment of the 
post of CITO at the ASG level, and the adoption of public 
sector accounting standards.  GAO members expressed concern 
over the insufficient resources provided to date for the 
Ethics Office and inadequate whistle blower tracking 
procedures. 
 
 
¶7. In separate meetings with individual Member States, 
delegates from Pakistan and Egypt reiterated the importance 
of ensuring a constructive negotiation process, rather than 
simply seeking a particular outcome. In addition, both 
representatives cited an "intensified mood of suspicion and 
distrust" between the G-77 and the developed states, 
including the U.S., following the GA,s decision to agree to 
a budget cap in December 2005. In their view, a "poisonous 
atmosphere" of mistrust had developed within the 5th 
Committee, seriously undermining the ability of Member States 
to work together and reach consensus on management reform 
objectives. (COMMENT: These comments reflect statements made 
by these delegations in the 5th Committee.  As in the 
Committee, the delegations failed to acknowledge that the 
decision to allow limited spending was a consensus decision. 
End Comment) 
 
-------------------------------- 
Mandate Review 
-------------------------------- 
 
¶8. On mandate review, ASG Robert Orr indicated that at the 
time the budget cap was established, it may have served as an 
impetus for progress on all fronts, in principle.  In 
practice, however, he said it became an impediment to 
progress for both management reform and mandate review. 
Looking back, ASG Orr added that what began as a western 
coalition, over time, became construed by G-77 members and 
the media as a loose coalition led by the United States. 
 
¶9. Ambassador Lars-Hjalmar Wide, Chief-of-Staff in the Office 
of the General Assembly President, suggested that future 
threats by either the G-77 or the developed states to seek 
votes on matters coming before the 5th Committee might serve 
as a  stick, to provoke progress on reform in the 5th 
Committee. On mandate review, Wide said three proposed 
confidence building measures were intended to reduce tensions 
between the G-77 and the developed states.  These confidence 
building measures included:  (i) acknowledgment that mandate 
review was not meant to be a cost-cutting exercise; (ii) the 
placement of saved funds into "envelopes," principally in 
terms of development mandates and (iii) the carving out of 
sensitive mandates. Wide regretted the inability to reach 
agreement on these matters with the lifting of the cap, but 
acknowledged that there simply wasn't sufficient time at the 
end to work through all the differences. 
 
¶10. Looking forward toward the 61st UN General Assembly 
session, the GAO team members expressed concern that, in the 
absence of a spending cap, management reform and mandate 
review initiatives would flounder, given the anticipated 
appointment of a new Secretary-General and the preoccupation 
of Member States with the ongoing conflict in the Middle East 
and other threats to international peace and security. PGA 
Chief-of-Staff Wide acknowledged this potential loss of 
momentum, but expressed optimism that further progress could 
be achieved during the next session. Referring to the 
confidence building measures, he perceived a more positive 
atmosphere emerging following the budget cap. These points 
were noted by both the two G-77 representatives and also by 
the Canadian and Australian delegates with whom the GAO team 
also met. 
 
------------------------------ 
GAO IMPRESSIONS 
------------------------------- 
 
¶11. It appears that the GAO participants may have come away 
from these meetings with the following impressions: 
 
-- The budget cap served to focus attention on the need to 
make progress on reform initiatives. 
 
-- The budget cap may have been used to increase G-77 
cohesion in the 5th Committee; 
 
-- The PWC Report may cause heightened tensions in the 5th 
Committee between G-77 Member States and the developed states 
on issues related to governance and oversight; 
 
--With respect to governance issues, the G-77 are concerned 
that some reform initiatives may reduce the GA's authority 
and role or impact the ability of every Member State to have 
a voice with regard to administrative and budgetary matters; 
 
--Positive first steps, though small steps, have been taken 
with regard to management reform; 
 
-- Mandate review, procurement, OIOS and Human Resources 
management will be considered during the 61st UNGA Session; 
and 
 
-- The general atmosphere in the 5th Committee, and in 
connection with mandate review, is a bit more positive in the 
wake of the lifting of the budget cap. 
 
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GAO REPORT TIMEFRAME 
--------------------------------------- 
¶12. Team members indicated that they would begin drafting 
their report on UN Management Reform by Labor Day, with a 
view to submitting it to Congress in late September/early 
October. They subsequently arranged to hold an exit 
conference with USUN in early August. 
 
BOLTON