BOARD OF AUDITORS REPORT ON STATUS OF UN CAPITAL

UNCLAS USUN NEW YORK 000514 SIPDIS SIPDIS E.O. 12958: N/A TAGS: AORC KUNR UNGA SUBJECT: BOARD OF AUDITORS REPORT ON STATUS OF UN CAPITAL MASTER PLAN: RISING COSTS FORESEEN ¶1. A well placed UN official shared with USUN M&R Ambassador Wallace a copy of a soon to be released report by the UN Board of Auditors (BOA) on the US $1.9 billion Capital Master Plan project. The report, expected to be released in two weeks, states that the project has been delayed by nearly a year. ¶2. The BOA states that a range of events explain the delay, such as the time taken by the GA to reach a decision on the project, the addition of new options to the project that increased its complexity, an inadequate planning schedule, and the vacancy of key positions within the CMP office, including the vacant Executive Director position, that has gone unfilled since June 2006. Such delays and changes have resulted in a projected cost increase of $95 to $105 million compared to the budget approved by the GA late last year. The report states that other cost increases identified during the design phase have reached $53 million putting the overall estimated overrun at $148 to $158 million. The BOA notes that these estimates "would be subject to further revision based on the evolving schedule of work." As of December 2006, the General Assembly had approved a cost ceiling of $1.9 billion and completion of the project in 2014. The BOA report concludes that delays and changes in the project have raised the cost of the CMP project by as much as an additional $158 million above the GA approved budget of $1.9 billion. ¶3. The BOA made several recommendations to place the project on a faster track including: the establishment of an advisory board to advise the Secretary General on financial matters; expediting the recruitment of an executive director, expediting the hiring of staff for the CMP office; and expediting the undertaking of key geotechnical and exploratory surveys. ¶4. The USUN M&R section has continued to press the Secretariat to expeditiously hire an executive director and SIPDIS to announce the selection of a construction manager. Ambassador Mark Wallace has sent three letters since January to Under Secretary General for Management Alicia Barcena to request information on the CMP project and he has personally demarched her and other Secretariat officials in an attempt to spur action in these areas. The last letter asking for a status report was sent on June 7, 2007. ¶5. It is uncertain if the CMP project will begin in early 2008 given the key vacancies in the CMP office. Conversations with senior UN officials have also indicated that Secretary General Ban may be re-considering the timeline and scope of the project, which could further delay the start of the current project and add increased costs. KHALILZAD