(6th meeting) Executive Board of UNDP, UNFPA and UNOPS (Second regular session 2025)

Good afternoon. So this meeting is called to order, and this is the 2nd regular session 2025 of the Executive Board of UNDP Europe. UNFPA and UNOPS. This segment is being held in accordance with the Rules of Procedure of the Executive Board and the approved Annual Work Plan. We will continue with the UNOPS segment and shall now take up Agenda Item 12, Financial, Budgetary and Administrative Matters, focused on the UNOPS Budget Estimates for the biennium 2026-2027. The report of the Advisory Committee on Administrative and Budgetary Questions, ACABQ, on the UNOPS budget estimates for the biennium 2026-2027. The status of the methodology for the distribution of liquid excess reserves. an update on the implementation of the findings of the 2023 Board of Auditors report, and the annual statistical report on the procurement activities of United Nations system organizations 2024. So, so these are, as you can imagine, very intimidating and very technical issues. And I'm pleased to welcome to the podium Ms. Hilary Balbuena, Chief of Staff, Carl Ludwig Sol, Chief Financial Officer, Ms. Anne-Claire Hauer, Director Procurement Group, UNOPS. So without further ado, I now have the pleasure to invite Mr. Karl Ludwig Scholl, Chief Executive Financial Officer, to deliver his statement. You have the floor, Mr. Scholl.

Mr. Vice President, Honourable Members, it's a pleasure to speak to you all today. Thank you for giving me the floor and for the opportunity to speak on this important agenda item. Before going into the details of the budget, I would like to remind the honorable members of the Board of the UNOPS mandate. UNOPS was established by the General Assembly decision in 1994. In 2010, the General Assembly Resolution 65176 reaffirmed its role as a central resource for the United Nations system in procurement and contracts management, as well as in civil works and physical infrastructure development, including related capacity development activities. The resolution recognized the potential for value-adding contributions through provisions of efficient, cost-effective services to partners in the areas of project management, human resources, financial management, and shared services. The resolution also encouraged UNOPS to enhance engagement as a service provider to various actors in the development, humanitarian, and peacekeeping arenas. UNOPS provides cost-effective project services through technical expertise in infrastructure procurement and project management. Our practical solutions create comparative advantage, de-risking implementation activities for partners in the United Nations system, and beyond, even in the most challenging operational contexts. The budget estimates for the biennium 2026-2027 will underpin the first half of the UNOPS Strategic Plan 2026-2029. The budget supports the UNOPS commitment to implementation through sustainable, efficient, and financially viable project services, providing practical solutions for partners, framed by 3 implementation goals and 9 implementation principles, with indicators and targets reinforcing accountability for implementation, for impact, in accordance with the UNOPS mandate. To do this, we rely on a flexible structure of country and multi-country offices, backed by global support and delivery structures to enable us to meet changing demands. It should be noted that unlike other UN entities, UNOPS' budget is fully funded from the service fees we charge, and UNOPS does not receive any assessed or voluntary contributions as core funding. This means that we continue to adjust our budget and organization to the financial realities in order to operate a balanced budget. The UNOPS operational model requires frequent engagement with our offices in the field and our liaison networks to monitor implementation and engagements to ensure that projections of needs of the clients are met, as well as mapping the environment for risk and opportunities. This is critical for an organization like UNOPS without core funding, and it's a way of working that is ingrained at all levels of the organization. It is a part of our active risk management mechanism, and senior leadership discussions. Additionally, UNOPS maintains, in accordance with our mandate, a diversified base of partners. This allows our projections for the 2026-2027 budget to reflect this diversity. Our commitment to delivering impactful project services with transparency, through agile systems and platforms, and appropriate stakeholder engagement, remains critical to the viability of our model and therefore guiding the proposed budget and investment which have been presented. UNOPS has aligned its budget for the 26-27 biennium with a harmonized presentation adopted by UNDP, UNFPA, and UN Women based on Decision 2424, in which the Executive Board approved harmonized approaches for cost classification, results-based budgeting, and budget presentation. At the same time, UNOPS has considered the JIU review on budgeting and presents a budget breakdown by objective of expenditure. The proposed 2026-2027 budget of $260 million represents a $65 million reduction from the previous biennium estimates, ensuring full cost recovery for UNOPS enabling functions. including UN Development Coordination. Special purpose activities are not included in these estimates but may be approved by the Board as per Financial Regulation 2203, subject to funding availability. A projected $6.4 billion in project expenses for the biennium ensures sufficient revenue, allowing UNOPS to reduce its average management fee from 5.5% in the previous period to 5.3% for '26-'27, addressing budget needs by lowering the fee rate. Responding to the ACABQ comments, UNOPS budget estimates for the biennium 2026 provide for more gradual increase compared to the previous biennium through a $65 million reduction, reduce the average management fee from 5.5% to 5.3%, and reduce the staff position number equally in field and non-field location and reduces the scope of the position conversions that were included in the budget estimates 24-25. A new framework memorandum of understanding between UNOPS and the UN Secretariat was signed in 2024 and is valid until 31 December 2033 and addresses a fee charged on services to the Secretariat. Excess reserves from the budget cycle are distributed to paying entities, including the United Nations. Refunds for excess reserves as of December 31st, 2021 have been fully processed. However, as determined by the Board, there were no liquid excess reserves available for refund as of December 31st, 2023. Regarding the management of UNOPS liquid excess reserves going forward, UNOPS has proposed a methodology for calculating these reserves, as requested by the Board. A pilot implementation was conducted and published with our 2024 financial statements and subsequently reviewed by UN Board of Auditors. The results of this review, along with the proposed methodology for refunding potential liquid excess reserves for the 2024-25 biennium were presented to the Executive Board in an information note. While a decision on any potential refund would not occur until the first regular session as of 2027, UNOPS management has recommended that the Executive Board approves both methodologies now. UNOPS is pleased to report that the Board of Auditors has satisfactorily closed their recommendation regarding the 2023 financial derivatives In their first regular session, the Executive Board had expressed concern about the audit findings and urged UNOPS to take prompt action. UNOPS responded by implementing several recommended actions, including suspending the hedging program, restructuring the Treasury Unit to improve segregation of duties and compliance, expanding the Investment Advisory Committee, and providing additional disclosures in the financial statements. These actions were assessed by the Board of Auditors during the last year audit and confirmed to have fully addressed the recommendation. On the annual statistical report on the procurement activities of the United Nations system organizations, we mark 80 years of the UN. Our credibility rests on how we responsibly manage our resources, and procurement is one of the most visible ways we turn those resources into tangible assets.

Results.

The annual statistical report on UN procurement prepared by UNOPS is a transparent record of how our collective resources are used, showing our effectiveness and accountability. The 2024 report reveals that 32 UN organizations spent $25.7 billion last year. Health was the largest category at $5.1 billion. Our supply chain is truly global, global, with Asia representing the largest share of procurement, followed by Europe. Africa's share continues to increase, now accounting for over one-fifth of the total. The report also highlights significant progress in sustainable procurement, with nearly all organizations integrating environmental, social, and economic factors in their purchasing. This shows how our decisions are opportunities to advance climate action, foster equality, and stimulate inclusive economic growth. The data also underscores our commitment to procuring from least developed countries, landlocked developing countries, and small island developing states, which strengthens local mandates. Let me conclude once again by expressing my appreciation for the support and the So thank you, Mr.

Sol, for your presentation. We open the floor for comments and questions. We have no pre-established list. Yeah, so in the absence of any request for the floor, oh, the Russian Federation, you have the floor, sir.

Thank you for giving me the floor. to that, I'd like to talk about a staffing question, and we've already expressed our concerns about the status of geographical representation in the leadership of UNOPS, which is mainly consisting of those from Western European and other states. We want UNOPS to take measures to gradually rectify this situation, including, including the relevant indicators in the matrix of results in the new strategic plan. We're also anticipating a plan for the mobility of the leadership staff of UNOPS, including the regional directors? Furthermore, I would like to ask how the situation is regarding individual contracts among the workforce of UNOPS, and how is it ensured that all of the workforce in key UN functions are working on permanent And to conclude, we would like to ask another question. We've pointed out that the Director of the UNOPS Group for Infrastructure and Project Management has for 3 years already been in the status of Acting Manager. So before that, there was the current Director of Risk and Compliance. In that regard, I would like to find out, what the delay is due to in the appointments to these posts. Thank you.

Any additional requests for the floor? I see none, so I give the floor back to the UNOPS leadership team? Yes, you have the floor.

Go ahead.

Thank you, Mr. President, and thank you for the Russian Federation questions. We'll be happy to respond to them. We're just inviting our Director of People and Culture Group to join the podium, if that's okay with you, to answer the few questions that you asked. Thank you.

Thank you, Mr. Vice Chair and the delegate from the Russian Federation for your questions. Thank you. There are quite a lot. Let me try and do some justice to them. I think the first one was around geographical representation in senior leaders, and especially in senior leadership. As of July 31st, Global North versus Global South in senior leadership, we were actually at 47-53, I think, 47-53. We do recognize that we need to at least get the other 3% up, but we've been very strategically looking at strategies in terms of some positions that are currently open. We've got the liaison— Washington liaison office that's open, director for communications that's open, and we'll be recruiting soon for the director for the Asia-Pacific region. And it is our intention to focus on that representation. I'm trying to read the questions from here. What is the plan for mobility of leadership staff? I think we are— the executive director recently made a decision to rotate, I think, regional directors from 3 regions: Latin America and the Caribbean, Africa, and Asia-Pacific. The regional director for Africa will be moving to Latin America, to LCR, Latin America and the Caribbean, from the 1st of October next week, and the one from Asia-Pacific region will be moving to Africa 1st of January, and the current director for LCR He's approaching retirement and he has been appointed as an advisor in the executive office to work on the SEEDS projects. And so we will be opening up recruitment for the Asia-Pacific region. And the question on individual contracts, um, we had a plan, if you remember, from 2023 when I came to the board, we had a clear plan on staggering the conversion of contracts. From, from ICA contract non-staff modality to staff modality. And I think 2023, we did convert about 167 positions. I think it's also reported to the board. And unfortunately, where we actually— that's the year that we also got an instruction for the net zero revenue effect from the board, which did not allow us to use any extra excess money to continue converting. However, that didn't mean the conversion stopped. We stopped the project, but we continued to encourage line managers or recruiting managers to include it in their business planning process, budgeting process, so that they can actually convert those roles that were clearly identified as inherently UN functions. 2024, we did convert, and I will share with the Bureau the number. I don't have the number offhand, but through the business planning cycle, we did actually convert a few number of positions. Indeed, the Director of IPMG has been in an acting capacity for the last couple of years, and I think that the Deputy Executive Director for Management and Policy has been working on how to redefine or to get clarity on that role, because they've been— we've been working with regions a lot to find out what can we kind of decentralize to the regions. and what would be left of that role. So we are in the process of kind of mapping that, and I think there will be clarity where the Deputy Executive Director for Management and Policy will then have clear TORs of what that position will be. The Risk and Compliance position, yes, it was vacant, but it's now filled with a substantive person. I think that's the only way I can explain the delay on the IPMG. We acknowledge that. We do recognize that. I think because of the other additions of functionality, functions that were added to headquarters, there's some overlaps and some kind of duplicity in other roles, so we need to be clear of what the IPMG Director will do after devolving other responsibilities to the region. Thank you.

That's a very clear explanation. So we don't seem to have any further requests for the floor. In that case, We are going to conclude this item, item 12. That's financial, budgetary, and administrative items on the UNOPS budget estimates for the biennium 2026-2027 and other matters discussed. That brings us to the end of the UNOPS segment. Executive— there is executive board action. on this particular subject. And I wish to inform the Board that a draft decision on Agenda Item 12, on the UNOPS Budget Estimates for the Biennium 2026-2027 and Annual Statistical Report on Procurement Activities of United Nations System Organizations 2024, is under preparation and will be presented for the Board's consideration later in the session. That concludes this— the UNEP segment. We will now continue with the UNDP segment, and the UNEP segment is concluded. Thank you so much.

You'll be relieved to know I practiced and my speech is well within the 5 minutes.

I know. Yes, 1:40. How are you? Good to see you again.

Nice to see you.

Okay.

So we continue with the UNDP segment. We continue with the UNDP segment. The first part is UNDP evaluation. So we have a very distinguished lineup of UNDP leadership to present the case. It's Agenda Item 15, UNDP Evaluation, under which the Board will consider the revised UNDP Evaluation Policy. So I'm pleased to welcome to the podium Ms. Isabelle Mercier, Director, Independent Evaluation Office, UNDP, and Mr. Marcos Neto, Assistant Administrator and Director, Bureau for Policy and Programme Support. So I now invite Ms. Mercier to present the revised UNDP evaluation policy. You have the floor, madam.

Thank you, Mr. President.

Thank you, Mr. Chair. Excellencies, distinguished delegates, it's a pleasure to be here and to present the UNDP Evaluation Policy for 2025-2030 and to reflect together on the role that evaluation can and must play in this rapidly changing world. This policy comes 6 years after the last one, and given the new and emerging challenges of our time, the ability of evaluation to inform better decisions to help us understand what's working and what isn't, and to guide what should be scaled, adapted, or stopped altogether has become not only useful but essential. You'll recall the independent assessment conducted ahead of this revision confirmed that the existing UNDP evaluation policy remained broadly sound. What we've done then, together with our UNDP BPPS colleagues, is refine the policy. And introduced targeted changes to respond to the evolving demands of our work and the shifting architecture of UNDP programming. I'd like to briefly run you through the 4 main changes. First, we introduced a formal theory of change for evaluation, which sets out clearly how evaluation contributes to accountability and learning and identifies the conditions that make this possible: strong systems, sustained investment, and a culture that values and uses evidence. Second, we reinforce the importance of risk-based planning and evaluation. At the IEO, thematic, corporate, and country program evaluations will continue to be aligned with the most pressing strategic challenges facing the organization, prioritizing complex, high-risk contexts. Decentralized evaluations will be encouraged to do the same, to support risk mitigation, learning, and adaptive management. Third, we expanded the types of evaluation work we will conduct. This includes a stronger focus on impact evaluations to understand what works and why, the scaling up of evidence syntheses which use AI to draw insights from across our growing evidence base, and more joint evaluations, particularly in the context of joint programs aligned with the UN system's emphasis on coherence. Finally, the policy highlights how crucial it is to involve stakeholders throughout every stage of the evaluation process, all the way from the initial design through to the development of recommendations. This approach in no way compromises our independence, which remains a cornerstone of our work. We believe engagement reinforces the relevance, credibility, and utility of evaluation by ensuring that our conclusions and recommendations are grounded in reality. In addition, there are 2 important institutional updates to highlight. The UN Office for South-South Cooperation will now be under the same evaluation policy as UNDP, UNV, and UNCDF. The Director of the Independent Evaluation Office will continue to have a single, non-renewable term, but of 7 years instead of 5, to strengthen both the continuity of the role and its independence. Mr. Chair, Members of the Board, as custodians of this policy and approvers of the UNDP evaluation work plans, Your role remains critical to ensuring that UNDP evaluation function continues to be credible and effective. Evaluation keeps us accountable to those who trust us and those we serve. It nurtures our collective hope, reinforcing the belief that we can learn, adapt, and do better together, helping organizations like UNDP move forward with greater clarity and confidence. We're very grateful for the Board's consistent support for the IEO and evaluation in UNDP. We look forward to continuing this dialogue with you, and of course I remain at your disposal for any questions you may have.

Thank you. Thank you, Ms. Mercier, for your presentation. I now give the floor to Mr. Netto to deliver his remarks. You have the floor.

Mr. President, it is a pleasure to always share a podium with you.

Thank you.

Excellencies, distinguished members of the Executive Board, let me open on behalf of UNDP management with a great and sincere appreciation to Isabelle and her team at the Independent Evaluation Office for their leadership in revising UNDP evaluation policy, as well as everything else they do every day of the year. The revised policy reflects a collaborative and inclusive process, incorporating the findings of the 2025 Independent Review, extensive consultations with regional bureaus and country offices, and constructive engagement between IEO and UNDP management. The revised Evaluation Policy comes at a pivotal moment for UNDP, as we deepen our focus on results, impact, and learning. Together with the new results-based management strategy, the revised policy represents a strengthened foundation for accountability, strategic learning and evidence-based decision-making across our development portfolio. Let me highlight key areas of progress. Stronger alignment with the resource-based management strategy. The policies now closely align with the revised UNDP resource-based management strategy launched earlier this year. This alignment is strengthening our ability to demonstrate results and learning, enhancing strategic planning and improving the quality of our development outcomes. For the first time, the Evaluation Policy includes a Theory of Change, which provides a clear framework to guide our evaluation efforts. It will sharpen the strategic focus of evaluations, inform resource allocation, and improve the utility of evidence in shaping programmes and policies that deliver transformational impact. The revised policy rebalances our evaluation portfolio, placing great emphasis on strategic and thematic evaluations that go beyond project outputs. This shift enables us to generate cross-cutting insights, enhance institutional learning, and better capture long-term development impact— very much what's necessary to capture during the implementation of the New Strategic Plan, which is much more based on portfolios and systems thinking. In that sense, the quality of decentralized evaluations has improved significantly, from a 21% rate of satisfactory or highly satisfactory in 2019 to 50% in 2024. Building on this progress, the revised policy places renewed emphasis on the planning, quality assurance, and use of decentralized evaluation. Excellencies, distinguished delegates, evaluation is a cornerstone of UNDP's accountability, To you, the Executive Board, our partners, and the people we serve. The revised Evaluation Policy reflects our collective ambition to ensure evaluations are not only credible and independent, but also timely, useful, and strategically aligned with our mandate. Again, I want to thank the Independent Evaluation Office for its leadership and the excellent collaboration throughout this process. UNDP management looks forward to working closely with the Board and the IEO to ensure the effective implementation of the new policy in the years ahead. Thank you very much, Mr. President.

Thank you, Mr. Netto, for your remarks. Now I open the floor for comments, questions. So we don't seem to have requests for the floor. Means that the presentations are very, very clear. Or you might have had heavy lunch. Either of the two are true.

Okay.

Thank you very much indeed. So in the absence of requests for the floor, that's going to mark the end of our presentations, and the Executive Board action on this matter will be that the Board— the draft decision on this Agenda Item 15 on UNDP evaluation is under preparation and will be presented for the Board's consideration later in the session. So we agree on that?

Yes.

So that brings us to the end of this item, Agenda Item 15. Thank you very much for your support.

Speak.

Yes.

I hope I will be able to— So we move to the The third segment of our work. The third segment of our work, it continues. We'll now continue with Agenda Item 2 under the joint segment, update on the assessment of how the Executive Board executes its governance and oversight functions. So in this regard, I'm pleased to welcome to the podium, on behalf of the Joint Working Group of the Executive Boards of UNDP, UNFPA, UNOPS, UNICEF, and UN Women, on the governance and oversight functions of the Executive Boards. So we have Ms. Sasha K. Watson from the Permanent Mission of Jamaica to give us a briefing on this matter. So I now give the floor to Ms. Watson. You have the floor.

Thank you so much, Mr. President, Excellencies, colleagues. I have the honor to deliver this statement on behalf of the co-chairs of the Joint Working Group of the Executive Boards of UNDP, UNFPA, UNOPS, UNICEF, and UN Women. During the last session of the board, we presented the group's agreed working methods and roadmap and developed in line with the terms of reference. We are pleased to formally present the group's proposal regarding the prioritization of the recommendations contained in the Joint Inspection Unit report on governance and oversight. Next slide, please. At this stage, and in line with the mandate of the Joint Working Group as well as the roadmap presented, we have reviewed and begun the process of prioritizing the 31 recommendations, both formal and informal. Next slide, please. As an initial step, we undertook the mapping exercise to evaluate each recommendation against 3 key criteria. Versus scope and complexity, feasibility within the mandates, and estimated timeline for implementation. Next slide, please. Thank you. This methodology allowed us to distinguish between short-term priorities, which are those that can be addressed within 1 to 12 months and require minimal structural changes, versus long-term priorities, which would exceed a period of 12 months and necessitate deeper structural reforms and broader coordination. Next slide, please. Allow me to share a few examples highlighting the categorization of the priorities. First, some examples of short-term priorities would include the harmonization of terms of reference for board secretariats, the establishment of a basic training framework for board members, the introduction of common communication platforms, and the review of informal meeting practices. In our view, though these require minimal structural change they have the potential to yield immediate improvements in transparency and coordination across the boards. Second, longer-term priorities would include the creation of board committees, for example, a board of finance or an oversight committee, as well as the integration of board roles and responsibilities on risk management responsibilities into policy frameworks and so on. We believe that these recommendations are more complex and more likely to necessitate intergovernmental negotiation depending on the scope and institutional implications. To support further discussion and facilitate collective decision-making, a prioritization matrix has been developed. This would have been circulated to members of the executive board. It details each recommendation, its categorization, and the proposed implementation timeline— that is, short-term or long-term. Next slide, please. Thank you. As a step forward, we have divided ourselves into 3 subgroups. The first subgroup will focus on governance and accountability. This subgroup will study recommendations 1 through 4, and its members include the Russian Federation, China, Japan, Germany, and Kenya. The second subgroup will focus on oversight, risk, and internal controls. This subgroup will study recommendations 5, 8, and 9. Its members include the United States of America, Romania, Eritrea, and Brazil.

Thank you.

The 3rd subgroup will focus on board functionality and support systems. This subgroup will study recommendations 6 and 7. Its members include Albania, Jamaica, Mozambique, Antigua and Barbuda, and the Kingdom of the Netherlands. It should be noted that members of the working group were invited to indicate the subgroup of their choice, and the chairmanship of each subgroup will be done on a rotational basis. We look forward to working closely with the Secretariat and to facilitate the work of the In addition, allow me to share with you the expected deliverables of each subgroup. They should meet and consult stakeholders when necessary, come up with initial deliverables by mid-September, draft a document that outlines stakeholders to be consulted for their respective thematic focuses, a timeline of consultations, as well as specifies the intended information to be sought from each stakeholder. By October 20th, the groups should have an informed feasibility and timeline, as well as a clear roadmap for the next few months. As it pertains to the wider working group, we will convene when necessary to hear updates of the subgroups based on the consultations undertaken with the relevant stakeholders. By the end of the year, the group will begin its work towards the development of the 2026 annual work plan as outlined in the roadmap. The JIU working group looks forward forward to working closely with the Secretariat to facilitate this work. In conclusion, the president— the group is pleased to formally submit this note to the chairmanship— sorry, to the membership, rather— for their consideration. We welcome your feedback and look forward to continued collaboration to ensure that the executive boards are well equipped to uphold effective governance, oversight, and accountability. Thank you.

Thank you, Ms. Watson, for your presentation. I now open the floor for comments, questions. So things seem to be very, very clear. In the absence of any request for the floor, we should move to the same predictable conclusion. Okay. So thank you for your presentation, and this concludes the consideration of Agenda Item 2. Update on the assessment of how the Executive Board executes its governance and oversight functions. On this matter, I wish to inform the Board that a draft decision on Agenda Item 2, on the update of the assessment of how the Executive Board executes its governance and oversight functions, is under preparation and will be presented for the Board's consideration later in the session. So that concludes our work and we wish to see you tomorrow morning. In that case, the afternoon meeting is going to be adjourned if you don't have a different view. Thank you very much for your support. Meeting adjourned.

2 announcements.

We will resume negotiations on the pending and last draft decision in a few minutes.

My second announcement is that the President and the Bureau have requested that I announce that there will be a change in the sequencing of the agenda items tomorrow. I have notified the board members and observer delegations accordingly, but I just wanted to make sure that we announce it at this session as well.

Thank you.

Thank you.