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EU Presidency Statement - Financial functioning of the UN

Mr. President

I have the honour to speak of behalf of the European Union. The countries of Central and Eastern Europe associated with the European Union (the Czech Republic, Estonia, Hungary, Lithuania, Poland, Romania, Slovakia, Slovenia) and the other associated countries (Cyprus and Malta) endorse this statement.

Mr President,

Allow me, firstly, to thank the Controller, Mr. Halbwachs, the Chairman of the ACABQ, Ambassador Mselle, and Inspector Abraszewski for the quality of the work carried out on this agenda item, and for presenting their reports.

Results-based budgeting already has a long history at the United Nations: it extends over three proposals by the Secretary-General, the first of which dates back to the reform projects in 1997, a first report in 1998, a further report in 1999, which was submitted to us with its Annexes, a report by the Joint Inspection Unit covering the whole of the United Nations system, and finally a last report, that of the ACABQ, which we have just received. There is no doubt that the General Assembly has a plethora of information on the matter. It took up this issue two years ago, at its 53rd session, when the General Secretariat was preparing the budget for the current two-year period. The General Assembly wanted prototype fascicles, corresponding to a new budgetary format, to be presented to it. These documents are now before us for our examination. We are required to take a decision over the coming weeks on the format of the budget for the next two-year period, and hence on the kind of budgetary discussions the General Assembly will hold at its next session.

The European Union attributes very great importance to results-based budgeting because it is dissatisfied with the quality of our current budgetary work. Results-based budgeting forms part of the European Union's concern to improve the Organization's ability to fulfill the objectives assigned to it and to increase the transparency of its activities for the benefit of Member States.

The cycle of programming, budgeting and evaluation is currently in a state of disequilibrium. And the gap is growing, from year to year, between the budgeting exercise and the evaluation exercise, which is now more achievement-oriented. The necessary link between planning and budgeting is currently lacking.

What changes would results-based budgeting bring about in our work? In the European Union's view, it would bring a gradual change in perspective to our budgetary discussions, without, however, constituting a revolution. The objectives, i.e. the mandates, and the expected achievements, which are in principle reflected in the medium-term plan, would be brought further into line with budgetary resources. Lastly, it would increase the amount of information that would be available to all the delegations and would add a further tool for monitoring the Organization's activities, ensuring that mandates are implemented effectively and that the Secretariat is accountable for them to the Member States.

As the ACABQ notes, preparatory and familiarization work for this new method will be essential for the General Secretariat:

• the terminology used must become stable and widespread within the Organisation;
  
  
• external factors likely to influence the achievements expected must be defined;
  
  
• the new budgetary format will have to be adapted to the particular sectors of the Organisation;
  
  
• greater responsibility for programme managers is the necessary counterpart to greater flexibility of management;
  
  
• information and accountancy systems will have to be enhanced to provide information consistent with results-based budgeting.

The European Union takes due note of the recommendations and warnings of the ACABQ and endorses them. The approach taken by the General Secretariat, which is also the most prudent one, seems to us to be the best. The draft budget for the next two-year period would in no way curtail the amount of information available to us at the moment. It would include indications of the objectives, expected achievements, indicators of results, external factors, proceeds and financial resources, the breakdown of which by category would be retained. The European Union has every confidence in the ability of the Secretariat to carry out this exercise successfully by the next session of the General Assembly, with the help of the CPC and the ACABQ, both of which will in due course have before them the draft budget for the next two-year period. Change will have to be gradual. In this respect, experience with the draft medium-term plan, as well as the report on the execution of programmes for the 1998-1999 two-year period, show that the Organization has been capable of mobilizing in a very short period of time and of producing very high quality documents.

The latitude for action for programme managers in the course of execution of the budget would be increased. However, it would continue, as it is today, to remain within the frame of decisions of the General Assembly, particularly as regards the establishment plans associated with the budget, and the Financial Regulation, which would not have to be changed. The greater latitude, which would be afforded to programme managers, would thus come not from changing the boundaries between the General Assembly and the Secretariat, but from a different allocation of powers within the Secretariat itself. On the contrary, the General Assembly would have further capacity for controlling and assisting decision-making, as the Secretariat would become accountable for effective achievements.

In the European Union's view, there would be a shift in balance in the cycle of programming, budgeting, execution and evaluation and it would become more consistent. Evaluation would become an essential aspect of decision-making when the draft budget is submitted to us.

Almost thirty countries, in all the regions of the world, have adopted a more results-based financial approach. The UN must gradually develop a results-based budgeting model, which meets its own needs. In most of those countries, particularly the European ones, and in the organisations which have adopted this format for presenting budgets, results-based budgeting has met a concern for transparency and not the desire to make savings. The European Union would endorse the remark by the ACABQ, in paragraph 17 of its report, that the question of the format of the budgetary document is neutral from the viewpoint of the level of resources. Under-performance as regards results should under no circumstances result in an automatic reduction in resources.

Results-based budgeting does not, therefore, reflect a concern for budgetary cuts, but rather a concern for transparency: the Organization must be accountable for the achievements assigned to it by the Member States and for the means allocated to it to do so, but not in an across-the-board manner. The European Union expects of this new format for the budgetary document that it will extend and consolidate the nature of the General Assembly's control over the Organization's activities as well as the quality of the dialogue between Member States and the Secretariat.

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