Fifth Committee, 17th plenary meeting - General Assembly, 80th session

I call to order the 17th meeting of the Fifth Committee at the 80th session of the General Assembly. Distinguished delegates, before we begin the business of the committee for this morning, I should like to inform delegations that as agreed by the committee on an exceptional basis, the report of the Advisory Committee on Administrative and Budgetary Questions contained in the advanced version of document A/80/485, available in English only, and will be issued as soon as possible. I thank all delegations for their flexibility to proceed with this document to facilitate the work of the Committee, and would like to emphasize that this is on an exceptional basis and in no way sets a precedent. there should continue to be full respect for the existing resolutions of the General Assembly on multilingualism. I invite the Committee to begin its consideration of agenda item 133, entitled "Financial reports and audited financial statements and report of the Board of Auditors". Delegations will recall that the financial report and audited financial statements for the year ended 31st December 2024. And the report of the Board of Auditors, as well as the report on the implementation of the recommendations of the Board of Auditors on the United Nations Joint Staff Pension Fund, were already introduced at the Committee's 12th meeting on 10 November. I now invite the Director of External Audit and Chair of the Audit Operations Committee, Board of Auditors, Mr. Richard Ballon, to introduce the reports of the Board as listed in today's journal. Mr. Ballon, you have the floor.

Thank you, Madam Chair, distinguished delegates of the Committee. On behalf of the Board of Auditors, it's my privilege to present today's critical and cross-cutting findings from the Board of Auditors' concise summary and as a report for the year ended 31st December 2024. First, on the concise summary, all entities received unqualified opinion and financial ratios remain generally satisfactory. The overall rate of implementation of the outstanding recommendation was 51.6%. With respect to United Nations cooperation, the Board identified weaknesses in inter-agency cooperation for back office functions and staff mobility, insufficient centralized data and low reporting expectation from top management. Second, on entities under the portfolio of China, the Board noted that the cumulative balance of the cost recovery fund had a surplus, pending further analysis, and that the allocation mechanism for investment review had not yet been developed. With regard to program support cost management, there was a lack of clarity between different reserves The Board also made observations on construction project of special political missions and price disparities in ICT procurement. On internal control, UNOPS progress in lost recovery remained limited. There were deficiency in major infrastructure project management and some cases of direct contracting could not be fully justified. Third, on the entities under the portfolio of Brazil, The Board noted that the second line oversight remains sometimes inconsistently structured, leading to gaps in partner selection and monitoring. The internal control framework of supply chain management was in certain cases outdated. Program monitoring was hampered by limitation in systems and there were challenges in implementing partner selection and assurance. For instance, UNICEF relied heavily on direct selection without sufficient justification and UNODC lacked formal guidelines for advance payment. Issues in monitoring and oversight were found, such as limited last mile supply delivery oversight. And fourth, on the entities under the portfolio of France, the board noted that the heavy reliance of UNDP, UNCDF, and UNHCR on earmarked funds. There were improvement that expected on financial internal controls, information system were formed and sufficiently adapted to needs, which hindered the collection of data essential for decision making. Overall, there was a need to clarify the respective role of each entity in order to increase their added value to the system. To finish, the Board found that crisis preparedness and response procedures were not always followed. This concludes my introductory statement. My colleagues and I will be happy to answer any question and provide any information the Committee may require. Thank you, Madam Chair.

I thank Mr. Bellam for his introduction. I now give the floor to the Deputy Controller and Director, Finance Division, Office of Program Planning, Finance and Budget, Ms. Maria Costa, to introduce the report of the Secretary-General on the implementation of the recommendations of the Board of Auditors. contained in its reports for the year ended 31st December 2024 on the United Nations and on the United Nations funds and programs as contained in document A/80/353 and addendum 1. Ms. Costa, you have the floor.

Thank you, Madam Chair, distinguished delegates. I have the honour to introduce the two reports of the Secretary-General on the implementation of the recommendations of the Board of Auditors, the Board, contained in its report on the United Nations A/80/353 and on the United Nations Funds and Programmes A/80/353/Add.1 for the year ending 31 December 2024. Those are being submitted in accordance with paragraph 7 of general assembly resolution 48/216B. It is important to note that the board issued unqualified audit opinions for all 18 entities that it audited. The report of the Secretary-General provides further information to comments that were already submitted to the board, which, in some cases, were included in the board's final reports to the Secretary-General and to the executive heads of the respective UN organisations. The reports also include information on the status of implementation the department responsible, the estimated completion date and the priority for each recommendation contained in the respective reports of the board, as well as an update on the status of implementation of the recommendations related to prior periods that the board considered not to have been fully implemented, including those relating to the EMOJA system. For 2024, the board made 51 new recommendations in its audit of UN volume 1, a significant reduction from prior years. The report sets out that, as of August 2025, closure had been requested for seven recommendations and that the other 44 were under implementation. In annex 1 to its report on UN volume 1, the board stated that, out of the 187 extant recommendations, 84, or 45 per cent, were implemented; 17, or 9 per cent, were overtaken by events; and 8,646 per cent remained under implementation. For the fifth year in a row, the board closed over 100 recommendations. In the board's report on the concise summary of the principal findings and conclusions contained in its report for the annual financial period 2024 for the United Nations and its funds and programmes, the board noted that the overall implementation of extant recommendations related to prior periods remained stable at 51 per cent. Management takes the board's audits seriously and continues to implement the resulting recommendations, despite on-going liquidity challenges and other operational difficulties. That fact should provide assurance that, in addressing areas identified by the oversight bodies, the United Nations organisations are committed to continuously improving. Finally, I would like to take this opportunity to express my appreciation to my colleagues from various entities of the Secretariat and from other United Nations organizations who will be available during the informal consultation sessions to respond to the questions from the distinguished delegates of the Committee. Thank you, Madam Chair.

Thank Ms. Costa for her introduction. I now invite the Vice-Chair of the Advisory Committee on Administrative and Budgetary Questions, Mr. Carlo Iacubucci, to introduce the related report of that Committee as contained in document A/AT/485. Mr. Iacubucci, you have the floor.

Thank you, Madam Chair, distinguished delegates. I am pleased to introduce the report of the Advisory Committee on the financial reports and audited financial statements and reports of the Board of Auditors for the period ended 31 December 2024. The Advisory Committee commends the Board of Auditors for the continued high quality of its reports and welcomes the fact that all entities under review have again received unqualified audit opinions. While the Committee notes the stable rate of implementation of the outstanding recommendations in 2024 compared with 2023, it also notes the higher number of recommendations where implementation is overdue and trusts that further efforts will be made to improve the implementation rate. The Committee notes the persistent liquidity challenges and the measures taken by the Administration. and looks forward to an update in the next report on the mitigating measures taken by entities affected by changes in donor contributions and the impact of the entities' financial positions. In respect of program support cost reserves, the Committee concurs with the Board and notes the need for clarity on the definition of and distinction between operating and contingent reserves. As well as precision in the definition and calculations of the corporate reserves, including on the methodology and criteria applied to determine the level required for capital investments. The Committee stresses the need for more transparency on management and use of reserves. On construction, the Committee notes the findings of the Board regarding information presented in some special political missions budget submissions for construction projects, which are less detailed than what is typically required for section 33 projects, and underscores the importance of robust planning, budgeting, procurement, and management of major construction projects in special political missions. The Committee also concurs with the Board's recommendation for a lessons learned exchange process on the major construction projects, with an emphasis on cost and schedule management, and trusts that more information in that regard will be provided in future reports, as well as in the next Capital Investment Planning Report. On human resources management, and taking into consideration the Board's recommendation that the Administration prioritize the implementation of the Staff Selection 2.0 program by formulating detailed implementation plans and timelines, and take proactive steps to improve the representation of under- and unrepresented countries, the Committee reiterates the need for continuous and intensified efforts to achieve equitable geographical representation and looks forward to the comprehensive human resources management strategy to be presented at the 80th session, as requested by the General Assembly. Madam Chair, distinguished delegates, The Committee welcomes the focus of the concise summary on the role of inter-agency cooperation as a key driver of enhanced efficiency and cost-effectiveness within the UN system, which is to be a fundamental pillar of system-wide efficiencies as the Organization progresses in the implementation of the UN80 reform initiatives. The Committee is of the view that consistent and as much as possible standardized reporting on relevant entities in that regard would provide useful data and information during the implementation of the UN Aid reform and trusts that the Board will continue to provide similar information in its future concise summary reports. The Committee makes further recommendations in its report, including on budget and asset management, accountability and oversight, and interagency cooperation. Thank you, Madam Chair.

I thank Mr. Iacobucci for his introduction. The floor is now open for any delegations who would like to make a statement. I now give the floor to the distinguished representative of Iraq on behalf of the G77 and China.

Thank you, Madam Chair. I have the honour to deliver this statement on behalf of the Group of 77 and China on this agenda item. Our group thanks all briefers for introducing their respective reports. Madam Chair, the group attaches great importance to the work of the Board of Auditors, and on this note, we express appreciation for high quality of board's reports and its recommendations. We also welcome the submission of the audited financial statement for 2024. The Group Comments, the Board of Auditors conducted a survey among 17 entities and submitted a concise summary report with a special section, which enabled the General Assembly to consider in detail the budget management across various entities. We believe that efficient financial budget management is crucial for United Nations to effectively deliver mandate and address global challenges and achieving the 2030 agenda and is equally critical to advancing the UN80 initiative to make the organization for agile, resilient and capable for providing high quality and efficient services while elimination redundancy of overlap its mandate implementations. The group noted that 17 audited entities, 11 had concluded the financial year with a surplus and six had recorded a deficit. When these numbers were 12 and 5 respectively in 2023. We further note with concern that IRMCT had a deficit for six consecutive year and reiterate that more effort must be to made to improve their financial situation. The board has assessed that in general, the financial position of all entities remained at least sufficient at the end of 2024. The liquidity ratios were comfortably high for more entities, but there are no further improvement. Those entities with ratios near or below May 1st face potential solvency issues in the future. Madam Chair, the group is concerned over a number of issues raised by the board in the report, including cost recovery services, development reform, supply chain management, among others. the group notes that by category financial and budgetary management program and project management governance and accountability as well as as asset management together constitute 77% of the total key finding in 2024 we emphasize that this management and oversight areas are crucial importance to effective mandate delivery and responsible stewardship of the UN resources and we request the secretariat to intensify its effort to achieve improvement in this regard. The group also notes the insufficient consultation of information and communication technology procurement requirements, as well as the lack of system-wide contracts, has resulted in a price disparities and higher costs. We look forward to strengthen consultation to enterprise ICT demand requirement across all secretariat entities. In this regard, the group underscores the need to enhance investment in oversight and monitoring capacities in decentralized operation, including the availability and reliable data, and the strengthening the improvement supervisory functions and pointed out the report of UNICEF, UNFPA and UN Women, recognizing that both external and internal auditors have crucial role. The group further stresses that senior management likewise requires robust, systematic and data-informed mechanism to support timing and well-founded strategic decision-making. The group remain deeply concerned that substantial financial determinant continuously occurred in the UNOPS during the past few years, we are looking forward to seeing accountability measure to be taken and internal control to be strengthened in a timely manner to avoid recurrence of such cases. The group reiterates its concern over the imbalance of geographical representation of staff in number of entities and the resident coordinator system, and stresses the need to intensify the effort to achieve equitable geographical representation among staff, with a special focus on underrepresented Member States. Madam Chair. Turning to the status of implementation of the recommendation of the Board, the Group notes that the overall implementation rate was 51.60% in 2024, which remains stable compared with 2023. The Group stresses the need for all entities to undertake prompt action to ensure that accepted recommendations of the Board are implemented as a matter of priority and hold the programme manager accountable for non-implementation. Furthermore, we reiterate our request to the secretariat to provide a full explanation for all delays in the implementation of all outstanding recommendations. Finally, the group assures you that we will constructively engage in this agenda item in a successful manner. I thank you, Madam Chair.

I thank you and I now give the floor to the distinguished representative of China.

Chair, China thanks the Chairman of the Board of Auditors, WTO Controller and the Vice-Chair of ACVQ for their presentations. China associates itself with the statement made by the representative of Iraq on behalf of G77 and China, and would like to add the following comments. The Board of Auditors is the most important external audit body of the UN. Independent, efficient, effective audit oversight helps to improve the transparency and compliance of UN financial management, thus playing an irreplaceable role in safeguarding the interests of Member States. The Chinese delegation thanks the BOA for the report submitted. This report is problem-oriented, and many of its recommendations echo the UN reform, the UNATO reform. It is of great significance for the efforts to deepen UN reform, strengthen management, improve governance, and enhance operational efficiency and capacity for mandate delivery. China knows that in addition to disclosing traditional issues such as inadequate implementation of UN management rules, losses and waste of resources, and low operational efficiency, this year's report forward many recommendations to optimize institutions in terms of construction project review and approval, project progress tracking, human resources management, procurement and supply chain management, among others. Strengthening institutional frameworks, adhering to the management rules and advancing accountability are essential for the steady and sustained progress of the UNAT reform initiative. These recommendations in the audit report should be taken very seriously and be thoroughly discussed in the following consultations. At the same time, China knows with concern that the overall implementation rate of audit recommendations in 2024 was only 51.6%. Six entities had lower implementation rates than in 2023, with the lowest being only 26%. We hope all relevant entities will earnestly implement the audit recommendations and effectively raise the implementation rate, thus contributing to better quality, efficiency and effectiveness of the UN system. China stands ready to actively engage with other Member States on this agenda item. I thank you.

I thank you. If there are no further comments, the Committee has thus concluded its general discussion on this agenda item. Informal consultations on this agenda item will be coordinated by Mr. Marius Ludovic Atundi of Cameroon. The meeting is adjourned.