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IdentifierCreatedClassificationOrigin
07USUNNEWYORK1099 2007-11-30 19:35:00 UNCLASSIFIED USUN New York
Cable title:  

UNGA/C-5: AUDIT REPORTS ON UNOPS AND UNHCR

Tags:   AORC PREL UNGA 
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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

SIPDIS
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