Background

Calls to reform the UN began soon after its creation in 1945. Despite  cycles of reform, UN member states continue to have concerns about  inefficient management operations. As the largest contributor of 192  member states, the United States has played a significant role in promoting  UN management reform, including calling for various financial and  administrative changes. The United States, through the Department of  State in Washington, D.C., and the U.S. Mission to the United Nations in  New York, continues to advocate reform of UN management processes.
In July 1997, the Secretary-General proposed a broad reform agenda to  transform the UN into an efficient organization focused on achieving  results as it carried out its mandates. In May 2000, we reported that while  the Secretary-General had substantially reorganized the Secretariat’s  leadership and structure, he had not yet completed reforms in human  resource management and planning and budgeting. In September 2002, to  encourage the full implementation of the 1997 reforms, the Secretary- General released a second set of reform initiatives, some expanding on  those introduced in 1997 and others reflecting new priorities. In February  2004, we reported that 60 percent of the 88 reform initiatives in the 1997  agenda and 38 percent of the 66 initiatives in the 2002 agenda were in  place.
In 2004 and 2005, a series of UN and expert task force reports  recommended a comprehensive reform of UN management and the UN  human rights apparatus. In September 2005, world leaders gathered at the  UN World Summit in New York to discuss global issues such as UN  reform, development, and human rights, as well as actions needed in each  of these areas. The outcome document from the World Summit, endorsed  by all members of the UN, outlines broad UN reform efforts in areas such  as oversight and accountability and human rights. The document also  called for the Secretary-General to submit proposals for implementing  reforms to improve management functions of the Secretariat.
In April 2006, we reported on weaknesses in the UN’s oversight and  procurement systems, both of which have been identified as important  areas for reform. We found that UN funding arrangements constrained  the ability of the UN Secretariat’s Office of Internal Oversight Services  (OIOS) to operate independently and direct resources toward high-risk  areas as needed. In addition, we found serious weaknesses in procurement  internal controls. Specifically, the UN lacked an effective organizational  structure for managing procurement, had not demonstrated a commitment  to improving its procurement workforce, and had not adopted specific  ethics guidance.
In October 2006, we reported slow progress in five key UN management  reform areas—management operations of the Secretariat, oversight,  ethics, review of programs and activities (known as mandates), and human  rights. Numerous reform proposals were either awaiting General Assembly  review or had been recently approved, and many of the proposed or  approved reforms lacked an implementation plan with time frames and  cost estimates for the goals stated in the 2005 outcome document. We  also identified several factors that could affect the UN’s ability to fully  implement management reforms, including (1) disagreements among  member states about the implications of the reforms, (2) the difficulty of  holding managers accountable for completing reform efforts due to the  absence of time frames and cost estimates, and (3) administrative policies  and procedures that could complicate the implementation process.

	Progress on UN Management Reform Efforts Has Varied

Since October 2006, the progress of UN management reform efforts has  varied from little or no progress to substantial progress in the five areas  we reviewed—ethics, oversight, procurement, management operations of  the Secretariat, and review of programs and activities (known as  mandates).

		Steps to Improve Ethics Have Been Taken

The UN has taken steps to improve organizational ethics since the fall of  2006. In the past year, the ethics office has hired a permanent director and  additional staff and has developed and provided ethics standards, training,  and guidance. The office has begun to enforce a whistleblower protection  policy, but concerns have been raised about the policy’s lack of  jurisdiction over UN funds and programs and weaknesses in the UN’s  internal justice system. Finally, the ethics office has collected financial  disclosure forms for 2005 and 2006 and a private consultant has begun to  review them, but the review has been delayed by the development of an e- filing system for the forms. Progress on UN ethics reform is shown in  figure 1.
In the past year, the UN has made substantial progress in staffing its ethics  office by hiring a permanent director and additional permanent staff. In  the fall of 2006, we reported concerns of UN experts that the newly  created UN ethics office was insufficiently staffed with a temporary  director and four professional and two administrative staff members. In  May 2007, a new director of the ethics office was appointed to a 3-year  term. As of October 2007, the ethics office had six professional and three  administrative staff. At that time, the director of the office told us the  office had sufficient staff to carry out its responsibilities.

			Some Progress Has Been Made in Developing and Sharing Ethics Guidance

As of October 2007, the UN ethics office had made some progress in  developing and circulating ethics standards and guidance and had begun  to develop a systemwide code of ethics. The office reported that it had  received 287 requests for services from staff at different levels of the  Secretariat between August 2006 and July 2007, including ethics advice on  issues such as potential and actual conflicts of interest, protection against  retaliation for reporting misconduct, and training.
The ethics office has increased ethics training within the organization,  including half-day ethics training workshops for over 3,000 staff members  at all levels of the Secretariat and consultations on the acceptance and  disposal of gifts received by staff in their official capacity. The office has  also developed new ethics standards, such as postemployment restrictions  standards. In May 2007, the ethics office published, and disseminated  throughout the Secretariat, the booklet Working Together: Putting Ethics  to Work. This guide highlights the main challenges to professional and  ethical conduct, clarifies the reasons behind ethical standards in the  context of the UN’s mission and values, and provides staff with resources  to put ethical principles to use, such as contact information for reporting  abuse. In addition, in August 2007, the office published four brochures that  have been used in outreach, training, and communication activities.
The ethics office has begun to develop a systemwide code of ethics for all  UN personnel, including those of UN bodies and agencies other than the  Secretariat as requested by the General Assembly in the 2005 World  Summit outcome document. The director of the ethics office told us the  development of a systemwide code of ethics was one of his top priorities  and would be undertaken in the near future, in consultation with staff and  management from multiple UN entities.

			Substantial Progress Has Been Made in Enforcing a Whistleblower Protection Policy

The UN has made substantial progress in enforcing a whistleblower  protection policy. The ethics office has begun receiving complaints of  retaliation, and several concerns have arisen during the handling of cases.  Between August 1, 2006, and July 31, 2007, the ethics office received 52  complaints of whistleblower retaliation. After its initial assessment, the  ethics office determined that 16 complaints warranted a preliminary  review. Of these 16, the ethics office referred two cases to OIOS for  further investigation following a determination that a prima facie case of  retaliation had been established. Of the remaining 36 complaints, the  ethics office determined that 19 fell outside the scope of its  responsibilities and/or referred them to other offices, and provided  advice and guidance on more appropriate actions to address 11  complaints. In addition, the office was copied on six complaints that were  primarily addressed to other offices or departments in the UN; in these  instances, the ethics office keeps track of and follows up on any pending  action by other offices.

			Several Concerns Have Been Identified with the UN’s Whistleblower Protection Policy

UN and State officials have raised concerns regarding the UN’s  whistleblower protection policy. Officials from the ethics office and a  nonprofit public interest group, the Government Accountability Project,  informed us that the success of the UN’s whistleblower protection policy  could be, in part, dependent on successful reform of the UN’s internal  justice system. UN and Government Accountability Project staff told us  that some UN staff members might not trust the current system to be fair  or impartial and, consequently, might not come forward with claims of  retaliation. In its August 2007 annual activities report, the ethics office  expressed a concern that it had not had an opportunity to provide input  into its role in the proposed new internal justice system in relation to other  offices, such as OIOS and the Office of the Ombudsman, and the office  expressed the importance of its inclusion in the justice reform process.
UN and State officials told us another concern about the whistleblower  protection policy is its lack of jurisdiction over UN funds and programs.  In August 2007, after initially reviewing a whistleblower retaliation case of  an employee at the UN Development Program, the ethics office and the  Office of Legal and Procurement Services concluded that the UN’s  whistleblower protection policy applies only to employees directly under  the Secretary-General. They also concluded that the office has no formal  jurisdiction over various UN funds and programs, including the UN  Development Program. UN and State officials told us that the  whistleblower protection policy is limited in its effectiveness if it is not  applied to the entire UN system. Similarly, the Government Accountability  Project has criticized the effectiveness of the current UN whistleblower  protection policy and recommended that the jurisdiction of the ethics  office be extended to UN funds and programs and possibly to specialized  agencies. In his August 2007 report on the activities of the ethics office,  the Secretary-General recommended that the General Assembly consider  broadening the jurisdiction of the ethics office to cover all UN entities and  to provide further guidance on this issue.

			Some Progress Has Been Made in Collecting and Analyzing Financial Disclosures

The UN has made some progress in collecting and analyzing financial  disclosure forms for 2005 and 2006. Financial disclosure forms have been  collected from UN staff members, and a private contractor has begun to  review them. The primary purpose of the financial disclosure program is  to identify potential conflicts of interest arising from staff members’  financial holdings, private affiliations, or outside activities and to provide  advice when conflicts are found. About 1,700 staff members were required  to file financial disclosure or declaration of interest statements for 2005.  About 98 percent of staff complied, and the remaining 2 percent were  referred to the Office of Human Resources Management for disciplinary  action. A total of 2,548 staff members were required to file forms for 2006.  The office reported that the increase in staff required to file likely reflects  an increased awareness of the program by the heads of departments and  their staff members. In addition, as a confidence-building measure, the  current UN Secretary-General and Deputy Secretary-General voluntarily  made their recent financial disclosure forms public.
The financial disclosure statements for 2005 were reviewed by a private  contractor and analyzed to determine any potential conflicts of interest  between the staff members’ confidentially disclosed private interests and  their official duties and responsibilities. In May 2007, the contractor  identified potential conflicts of interest in 17 of the cases reviewed, or  about 1 percent. Of these cases, 14 staff members accepted the advice of  the private contractor to address the potential conflict and 3 cases were  referred to the ethics office for final resolution due to disagreements with  the contractor.
The 2006 review is not yet complete. The deadline for submitting forms for  2006 was delayed until May 31, 2007, as a consequence of the development  of an online e-filing system. In order to enhance efficiencies and  standardize procedures, the private contractor developed an online e-filing  system in liaison with the ethics office to simplify and expedite filing  requirements. The director of the ethics office told us that the process for  the 2006 review was ongoing, and, as a result, the compliance rate was not  finalized as of September 2007.
The ethics office plans to review the online financial disclosure form and  accompanying guidelines in consultation with other UN offices to decide  whether modifications need to be made. In addition, the office reported  that it is conducting a review to determine whether financial disclosures  should be required of officials other than those of the Secretariat.

		Steps to Improve Oversight Have Been Taken

Steps have been taken to improve UN oversight capabilities. After almost 2  years of discussions that included negotiating its composition and  responsibilities, member states established an Independent Audit Advisory  Committee (IAAC) in June 2007. Since our October 2006 report, OIOS has  worked to improve the capacity of individual divisions, including internal  audit and investigations. However, UN funding arrangements continue to  constrain OIOS’s ability to audit high-risk areas, and the General Assembly  has not authorized OIOS’s financial and operational independence.  Progress on UN oversight reform is shown in figure 2.
The UN has made some progress in creating IAAC, but the committee is  not expected to be operational until January 2008. In June 2007, member  states established IAAC to provide an external, independent assessment of  UN oversight capabilities based on best practices in the private sector as  well as the experiences of other international institutions.
In approving the creation of IAAC in June 2007, the General Assembly also  established the committee’s terms of reference. These terms include the  following guidelines and requirements:    membership of 5 individuals, preferably from a pool of at least 10  candidates proposed by member states, based on regional and  geographical representation and selected by the General Assembly;   an evaluation process for candidates through consultations with an  external relevant institution, such as the International Organization of  Supreme Audit Institutions; and   membership appointment for a term of 3 years, with the possibility of one- time re-election.
The IAAC’s responsibilities include, but are not limited to    examining OIOS’s work plan, taking into account the work plans of the  other UN oversight bodies; reviewing the adequacy of OIOS’s budget, taking into account OIOS’s work  plan;   advising on the effectiveness, efficiency, and impact of OIOS’s audit and    advising the General Assembly on potential oversight issues based on  review of UN financial statements and Board of Auditors reports.
The guidelines and requirements represent a compromise among the  member states, according to member state representatives and State  Department officials. Member states disagreed on some of the initially  proposed responsibilities of IAAC. For example, the United States and  several other countries had originally favored that candidates for  membership be referred by the International Organization of Supreme  Audit Institutions and that members not be eligible for re-election. Other  member states disagreed. In addition, State wanted IAAC to be responsible  for assessing the work of all UN oversight bodies, including the UN Board  of Auditors and the UN Joint Inspection Unit. However, both of these  bodies strongly resisted having IAAC oversee their respective functions,  and it was ultimately decided that IAAC would focus primarily on the  work of OIOS while taking into account the work plans of the other UN  oversight bodies. State Department officials told us they were satisfied  overall with the creation of IAAC despite the various compromises. The  five members of the newly created IAAC were elected in November 2007,  and the committee is expected to be operational in January 2008.

			Some Progress Has Been Made in Strengthening OIOS

The UN has made some progress in strengthening the Office of Internal  Oversight Services. The office has strengthened the capacity of its internal  audit, investigation, and evaluations and inspections sections. However,  OIOS funding arrangements continue to hinder its operational  independence.
Since our last report, OIOS has strengthened the capacity of its internal  audit, investigation, and evaluations and inspections sections. For  example, OIOS created nine new audit posts for its internal audit division  and combined two previously separated internal audit divisions in New  York and Geneva within a single division. OIOS established a professional  practices section—fully staffed with six regular staff and three general  services staff—that is responsible for (1) implementing OIOS’s risk  assessment framework, (2) implementing a quality assurance program,   (3) devising productivity tools, and (4) improving performance reporting  to management. OIOS also established an information and communication  technology section, which has developed an audit strategy and conducted  risk assessments for the information and communication technology  functions of various departments at headquarters.
Several steps have also been taken to improve OIOS’s investigations  division. Member states decided to keep investigations in OIOS rather than  move it to the Secretariat’s Office of Legal Affairs, despite a July 2006  external evaluation’s recommendation to shift the investigations function  to a department in the Secretariat. OIOS argued that such a shift would  significantly diminish the UN’s oversight functions by potentially  compromising the independence of investigations and creating a potential  conflict of interest. Since 2006, about 16 new posts have been created for  the investigations division. OIOS has established a separate special  investigations task force for sexual exploitation and abuse, as well as a  procurement investigations task force.
Finally, OIOS has made progress in reducing its range of functions and  improving the capacity of its evaluations and inspections sections. For  example, in order to reduce some of its multiple responsibilities and focus  more directly on its oversight responsibilities, the office has shifted  several nonoversight related functions to the UN Department of  Management, including its consulting function. In addition, in 2006, the  evaluation section was strengthened by the addition of two posts to  increase the number of evaluations that can be undertaken.
Funding arrangements at OIOS continue to impede the independence of  internal auditors. OIOS is designed to be an operationally independent  entity responsible for assisting the Secretary-General in fulfilling his  internal oversight responsibilities of the resources and staff of the UN  through internal audit, monitoring, inspection, evaluation, and  investigations. However, OIOS faces two conflicts that have been  impeding its independence: (1) OIOS’s budget is subject to the review of  the Department of Management, for which OIOS has oversight  responsibility, and (2) OIOS must negotiate funding for nearly two-thirds  of its budget with the entities it is chartered to audit. Without operational  independence, OIOS is constrained in its ability to prevent or mitigate  risks to the UN’s resources and personnel. These risks include fraud,  waste, abuse, inefficiencies, and mismanagement. In April 2006, we  reported that UN funding arrangements adversely affect OIOS’s budgetary  independence and constrain its ability to audit high-risk areas. For  example, OIOS depends on the resources of the funds, programs, and  other entities it audits, and the managers of these programs can deny OIOS  permission to perform work or not pay OIOS for services. State and OIOS  generally agreed with our overall findings and recommendations.
Discussion of the revision of OIOS’s funding arrangements was deferred  from the 61st to the 62nd session of the General Assembly due to a lack of  consensus on funding issues. In its report to the 62nd session on its  activities between July 1, 2006, and June 30, 2007, OIOS reiterated that the  UN does not yet have a formal and structural internal control framework  that would provide reasonable assurance to management that its financial  resources are being handled effectively and that its objectives are being  achieved. OIOS pointed out that serious deficiencies in internal controls  have left the UN susceptible to mismanagement and fraud, particularly  regarding procurement activities in Sudan and Congo. OIOS reported that  its internal audit division continues to rely directly on organizations  funded from extra-budgetary resources to provide the resources necessary  to finance a portion of its functions. This reliance does not allow the  division to focus its attention on the areas of highest risk and constrains  the implementation of its audit work plan. For example, it reported that  OIOS is unable to provide reasonable assurance that all high-risk areas  have been identified and are being addressed in the United Nations  Environment Programs. OIOS concluded that its dependence on extra- budgetary funding significantly affects its independence.

		Steps to Improve Procurement Have Been Taken

The UN Secretariat has improved the UN procurement process, but a  number of reform issues have not moved forward since our October 2006  report. Some progress has been made in strengthening the procedures for  its procurement staff and suppliers, developing a comprehensive training  program for procurement staff, and developing a risk management  framework. However, the UN has made little or no progress in establishing  an independent bid protest system and creating a lead agency concept for  procurements, whereby specific UN organizations would procure certain  goods and services in order to enhance division of labor, reduce  duplication, and reduce costs. In addition, since our October 2006 report,  other organizational issues have arisen that may affect the UN’s  procurement reform efforts. Progress on UN procurement reform is shown  in figure 3.
The UN Secretariat has made some progress in strengthening the  operating procedures for its procurement staff and suppliers. In December  2006, the Secretariat issued a bulletin on postemployment restrictions for  former UN staff involved in procurement. The bulletin was issued  following several incidents in recent years in which UN officials and  former officials were involved in unethical and improper procurement  activities. The December 2006 bulletin requires that former UN staff  members, for 1 year following UN employment, are prohibited from  accepting employment or compensation from any UN contractor and, for 2  years, are prohibited from acting on behalf of others in procurement- related matters. In an additional measure to strengthen its procedures, the  UN also issued, in May 2007, a revised supplier code of conduct. The code  requires that suppliers are responsible for adhering to the postemployment  restrictions by not employing former UN staff members for at least 1 year  following a staff member’s separation from the UN. However, a proposal  to increase the minimum threshold for contracts required to be reviewed  by the Headquarters Committee on Contracts from $200,000 to $500,000  has not been approved. OIOS previously recommended that the threshold  be increased, and, according to Procurement Division officials, increasing  the threshold would assist in expediting procurements and better utilizing  their time.

			Some Progress Has Been Made in Developing a Training Program for UN Procurement Staff

The UN Procurement Division has made some progress in developing a  comprehensive training program for procurement staff. Although the  program is not expected to be formally in place until early 2008,  procurement staff are currently being trained in contracting, acquisition,  and other specialized subjects. The training is part of a development plan  to provide a career path for procurement staff—those who complete the  training will be eligible to be certified by internationally recognized  procurement institutions. In addition, according to UN Procurement  Division officials, all procurement staff in headquarters received ethics  training in 2007. As of October 2007, some field staff had received the  ethics training and, according to UN officials, the UN expects to have  provided the training to all field staff by the end of March 2008.

			Some Progress Has Been Made in Developing a Risk Management Framework

The UN Procurement Division has made some progress in its efforts to  develop a risk management framework. In July 2007, a Planning,  Compliance, and Monitoring Section was established and a chief was  appointed to establish tools to detect potential transaction problems and  minimize risks. Also, a proposal for implementing the concept of best- value-for-money is under development and expected to be put into  practice by the Procurement Division in March 2008. In addition, the UN  Department of Management is in the initial planning stages of establishing  a UN-wide risk management framework, known as the Enterprise Risk  Management concept. However, as of September 2007, the concept is still  in the planning stages, time frames and costs for its implementation have  not been established, and risks associated with procurement activities  remain. For example, the OIOS Procurement Task Force reported in  October 2007 that it had found multiple instances of fraud, waste, and  mismanagement—including 10 instances of fraud and corruption in cases  with an aggregate value of over $610 million—resulting in  misappropriation of resources or the unjust enrichment of vendors and  their agents in excess of $25 million. The task force reported that a  number of cases have been referred to national authorities for criminal  prosecution or to the UN for consideration of subsequent legal action. It  has also recommended civil recovery of monetary damages.

			Little or No Progress Has Been Made in Establishing an Independent Bid Protest System

As of October 2007, an independent bid protest system had not been  established. The lack of an independent bid protest system limits the  transparency of the procurement process by not providing a means for a  vendor to protest the outcome of a contract decision to an independent  official or office. Such a system would provide reasonable assurance that  vendors are treated fairly when bidding and would also help alert senior  UN management to situations involving questions about UN compliance.  According to the UN Procurement Division, a draft process, which  includes an emphasis on best practices from public- and private-sector  procurements, is expected to be finalized by the first quarter of 2008.  Procurement Division officials told us that, in the meantime, they have  enhanced communications with vendors, including developing a more  systematic debriefing procedure for vendors whose bids were  unsuccessful.

			Little or No Progress Has Been Made in Establishing a Lead Agency Concept for Procurement

The UN has made little or no progress in establishing a lead agency  concept, whereby specific UN organizations would procure certain goods  and services in order to enhance division of labor, reduce duplication, and  reduce costs. For example, the World Food Program might be best suited  to procure items for air transport needs, while the UN Inter-Agency  Procurement Services Office might be best at procuring certain vehicles.  In a report on procurement reform submitted to the General Assembly in  June 2006, the UN projected that implementation of the lead agency  concept would take 6 to 12 months. However, in December 2006, the  General Assembly did not approve a proposal to adopt the concept. In the  absence of the General Assembly’s approval, Procurement Division  officials told us they have established informal relationships with several  UN organizations that, under current rules and regulations, facilitate the  procurement of certain specialized goods and services, as needed.

			Several Procurement-Related Issues Have Not Moved Forward Due to DPKO Reorganization

The General Assembly did not consider several procurement reform issues  during the recently completed 61st session because of the UN’s June 2007  reorganization of the UN Department of Peacekeeping Operations  (DPKO). Issues that are currently unclear include operational  procedures, such as establishing lines of accountability, delegation of  authority, and the responsibilities of the Departments of Management and  Peacekeeping Operations. Because of the reorganization, announced by  the Secretary-General in February 2007, the Secretariat did not submit  several reports on procurement during the 61st session, as requested by  the General Assembly. According to Secretariat officials, they did not  submit the reports mainly because the reorganization of the DPKO created  several procurement-related concerns that have not yet been addressed.

		Steps to Improve the Management Operations of the Secretariat Have Been Taken

The UN has taken actions to improve some of the management operations  of the Secretariat, but many reform proposals still have not moved  forward. Some progress has been made on issues involving human  resources and information technology, while little or no progress has been  made in reforming the UN’s internal justice system, reforming certain  budgetary and financial management functions, and improving the delivery  of certain services. Since our October 2006 report, the Secretariat has  issued several reports on management operations that the General  Assembly is expected to consider during the current (62nd) session.  Progress on reforming management operations of the UN Secretariat is  shown in figure 4.
The UN has made some progress in improving human resource functions.  Since we issued our October 2006 report, the UN Secretariat has issued  several reports with proposals that, if implemented, could improve some  human resource functions. However, the proposals are, in large part, still  awaiting General Assembly review. In addition, the Secretariat has not  completed reviews and analyses of other human resource reform  proposals.
In late September 2006—too late for inclusion in our October 6, 2006  report—the Secretary-General released a report entitled Investing in  People that included a human resources management framework aimed at  strengthening the UN’s human resources goals. The report included  discussions of several human resources issues and specifically stated that    staff mobility is essential to creating a more-versatile, multiskilled,  experienced staff capable of handling the UN’s operations, which have  changed dramatically in the last 20 years;   an effective career development policy serves both the UN and its staff  members by building and maintaining an international civil service capable  of meeting the UN’s present and future needs, as well as meeting the  development needs and aspirations of the staff; and   a one-time staff buyout could enable the Secretary-General to realign staff  to meet the UN’s changing priorities, while facilitating retirement or  separation of staff who can no longer meet their career aspirations.
The General Assembly considered the report during the 61st session and,  in large part, postponed making decisions on key issues. For example, in  a January 2007 resolution, the General Assembly postponed decisions  regarding streamlining contractual arrangements and harmonizing  conditions of service and rejected the proposed one-time staff buyout.  Also, since its May 2006 rejection of the concept, the General Assembly  has not taken steps to redefine the role of the Deputy Secretary-General to  assume formal authority and accountability for the management and  overall direction of the operational functions of the Secretariat.
From March to May 2007, the Secretariat submitted reports to the General  Assembly, as requested, on human resource issues such as recruiting and  staffing, conditions of service, and contractual arrangements. However,  because of the General Assembly’s focus on the reorganization of the  DPKO and other issues during that time frame, the General Assembly did  not consider these issues, which are currently rescheduled for  consideration during the 62nd session. According to U.S. and UN officials  and most of the 17 member state delegates we spoke with, reforming these  and other human resource functions is likely to continue to be difficult  because of long-standing disagreements among member states.

			Some Progress Has Been Made in Improving Information Technology

The UN has made some progress in improving information technology.  The position of chief information technology officer (CITO), created by  the General Assembly in August 2006, was filled in July 2007, and the  official took office in September 2007. The leadership of a CITO is  necessary to help ensure greater integration of the Secretariat’s workflow  and knowledge management by allowing program objectives to be  integrated with budgetary and financial data into one process, with the  goal of enabling the Secretariat to act more transparently and efficiently in  managing staff and procuring goods and services of greater quality and  quantity, at lower levels of risk. The CITO is especially important at the  present time because the UN is in the process of developing a new  organizationwide information system—known as the Enterprise Resource  Planning (ERP) system—to replace its antiquated integrated management  information system. Creation of the ERP has been in the planning process  for several years, and, according to Secretariat officials, implementation of  the system is expected to start in 2008. During the planning process, the  UN has worked with potential vendors to help ensure that the new system,  when implemented, will adequately support the global functions of the  UN, including an ever-growing number of peacekeeping missions. As of  October 2007, the Secretariat had not selected the firm that will implement  the new system. According to UN officials, the Secretariat is expected to  announce a decision in 2008.
The Secretary-General did not submit a comprehensive report on  information management, including cost estimates, in March 2007, as  requested by the General Assembly. According to UN officials, the report  was not submitted because the ERP planning process was ongoing, a CITO  had not yet been named, and the Secretariat was still collecting data on  information technology and other issues. The Secretariat plans to present  reports on information technology to the General Assembly during the  62nd session, on topics such as the implementation of the ERP and  governance of information and communications technology.

			Little or No Progress Has Been Made in Reforming the UN’s Internal Justice System

The UN has made little or no progress in reforming its internal justice  system. According to a July 2006 report by an independent external panel  of experts, the UN’s internal justice system was outdated, ineffective, and  compromised. The panel’s report concluded that effective reform of the  UN is not possible without an efficient, independent, and well-resourced  internal justice system that safeguards the rights of staff members and  effectively helps ensure the accountability of managers and staff members.  Although the General Assembly agreed in April 2007 to establish a new  internal justice system, many issues involving organizational relationships,  personnel, and funding of the new system are still unclear. As of October  2007, the General Assembly had yet to decide who would be covered by  the new system, how judges within the Office of the Ombudsman would be  nominated and selected, and what resources would be needed. According  to the Secretariat, member states aim to implement the new system by  January 2009.

			Little or No Progress Has Been Made in Reforming Certain Budgetary and Financial Management Functions

Since our October 2006 report, the UN has made little or no progress in  improving certain budgetary and financial management functions. The  General Assembly has rejected some proposed reforms and taken no  action on others. For example, to improve cash management and  operational flexibility, the Secretary-General proposed that peacekeeping  accounts be consolidated. In July 2007, the General Assembly rejected this  proposal. The Secretary-General also proposed to improve strategic  budgetary planning and implementation by reducing the number of  sections in the budget from 35 sections to 13, and provided detailed  information on this proposal in May 2006. However, as of October 2007,  the General Assembly had not taken action on the proposal. Other  financial management reform proposals that have not been adopted  include retaining budget surpluses for use in subsequent periods, charging  interest on arrears of member states’ assessed contributions, and creating  a separate account to cover certain unanticipated expenditures arising  from exchange rate fluctuations and inflation. The Secretariat has  prepared a number of reports that the General Assembly is scheduled to  review during the current (62nd) session and is reviewing other proposed  reform actions, such as the management of trust funds.

			Little or No Progress Has Been Made in Improving the Delivery of Certain Services

The UN has made little or no progress in improving the delivery of certain  services. In May 2006, the General Assembly asked the Secretary-General  to conduct several cost-benefit analyses to determine whether certain UN  services could be improved. Among the services are internal printing and  publishing processes; medical insurance plan administration; information  technology support; payables, receivables, and payroll processes; and staff  benefits administration. Subsequently, the Secretariat initiated several  projects to address these reform proposals but has not completed its  analyses. For example, the Secretariat is currently collecting data from  staff participants in the UN medical plan and reviewing alternative delivery  methods for payroll and other functions.
The Secretariat has not issued a comprehensive report on public access to  UN documentation, which the General Assembly requested be submitted  during the 61st session. The Secretariat developed a detailed policy  proposal that includes resource requirements, financing mechanisms, and  proposal of a fee structure. However, according to Secretariat officials, the  Secretary-General intends to discuss the proposal with member states  before formally submitting it.

		Limited Steps Have Been Taken on the Review of UN Programs and Activities

Although UN member states agreed to continue a review of UN programs  and activities (known as mandates) in 2007, no actions have been taken to  eliminate or consolidate mandates. Member states continue to disagree on  the scope and process of the review and lack the capacity to carry out the  review, according to State. Consultations among member states on how to  move forward on the issue will continue into the 62nd session. Progress in  reviewing UN programs and activities is shown in figure 5.
In 2005, UN member states agreed to complete a review of all UN  mandates with the goal of strengthening and updating them to more  accurately reflect the needs of the organization. After some initial minor  progress, this effort has diminished substantially due to member states’  ongoing disagreements on the scope and process of the review. In  addition, the review has not advanced due to the lack of capacity among  member states to evaluate the mandates in a substantive matter, according  to State.
Phase I of mandate review, which covered all mandates 5 years old or  older and not renewed that originated from the General Assembly, was  completed in November 2006. We reported in 2006 that throughout the  Phase I review, member states disagreed on which mandates to include in  the review and what to do with any savings generated by the potential  elimination or consolidation of mandates, which led to limited or slow  progress. Members of the G-77 contended that the scope of the review  should include only those mandates 5 years old or older that have not been  reviewed since they were adopted. Phase I thus consisted of a review of  626 mandates originating from the General Assembly. As a result of Phase  I, member states agreed to set aside 74 completed mandates and requested  more information from the Secretariat on 15 mandates. No agreement  was reached on the remaining mandates, and no mandates were  consolidated or eliminated as a result of the review.
Member states agreed to carry out a Phase II review of mandates to  include mandates both renewed and not renewed. The planned approach  was to review mandates by thematic cluster. The initial goal for beginning  Phase II was January 2007. Phase II was delayed by the lack of a co-chair  on the Informal Working Group on Mandate Review from January 2007 to  April 2007 and again from July to October 2007. In October 2007, the  process was far from complete, with only one of the nine clusters  addressed.
On September 17, 2007, the General Assembly, per the request of the  outgoing President of the General Assembly, adopted an oral decision to  continue consultations among member states on how to proceed with  mandate review in the 62nd session. State officials told us that a new  approach is necessary for the review and that it would be meaningless to  proceed unless member states identify a process that can achieve  meaningful results. State also informed us that there was no  implementation plan for mandate review. New parameters for the  continuation of the mandate review process have been proposed, but  progress remains to be seen.

	Various Factors Have Slowed the UN’s Management Reform Efforts

Various factors have slowed the UN’s efforts to improve the management  of the Secretariat, and many remaining UN management reforms cannot  move forward until these factors are addressed. During our review, we  identified four key factors that hinder progress on UN management  reforms: (1) disagreements among member states on UN management  reform efforts, (2) lack of comprehensive implementation plans for some  management reform proposals, (3) administrative policies and procedures  that continue to complicate the process of implementing certain complex  human resource initiatives, and (4) competing UN priorities, such as the  proposal to reorganize the Department of Peacekeeping Operations, that  limit the capacity of General Assembly members to address management  reform issues.

		Disagreements among Member States Continue to Impede Efforts

Disagreements within the General Assembly continue to limit the  implementation of management reforms. Progress on UN management  reform efforts is dependent in large part on member states reaching  consensus, which can be a time-consuming process as the UN is composed  of 192 diverse member states that have differing views on a wide array of  issues. (App. III shows the typical management reform decision-making  process at the UN for issues requiring General Assembly approval.) In  October 2006, we reported that disagreements between G-77 and  developed countries over the broader implications of management  reforms may affect the UN’s ability to fully implement them.
From April through September 2007, we discussed management reform  efforts with delegates from 17 member states representing Africa, Asia,  Europe, Latin America, the Middle East, and North America. In these  discussions, 15 of the 17 delegations told us that the number one challenge  to continued progress on management reform efforts is member state  disagreements on the priorities and importance of the remaining reform  efforts. For example, member states continue to disagree on the scope  and process of the review of UN mandates, and some member states are  concerned that mandates important to them will be eliminated. For that  reason, no mandates have been eliminated or consolidated as a result of  the reviews—two of the goals of the process, according to State.
Representatives of member states we spoke with repeatedly stated a clear  need for more constructive engagement on reform efforts, particularly  between the United States and G-77 countries. For example, four member  states—Chile, South Africa, Sweden, and Thailand—have launched the  Four Nations Initiative in an effort to provide new ideas and perspectives  on governance and management of the UN Secretariat. A State official told  us the process appears to be a “credible effort” by member states that  complements the UN management reform process. However, he added  that other member states’ views on this initiative and the potential of the  initiative to overcome disagreements among member states are unclear.

		Lack of Comprehensive Implementation Plans Continues to Impede Management Reform Efforts

The UN has not developed comprehensive long-term implementation plans  for some management reform proposals. Establishing implementation  plans is a practice that increases the transparency and accountability of  the reform process. We previously recommended that State work with  other member states to encourage the General Assembly and the  Secretary-General to include cost estimates and expected time frames for  implementation and completion of each reform effort as it is approved.  During our current review, we found little evidence that time frames,  completion dates, and cost and savings estimates for completing the long- term implementation of specific management reforms had been  established. In addition, most of the approximately 20 cost-benefit  analyses and other assessments of management reform issues that the  Secretariat had planned to complete by March 2007 have not yet been  submitted to the General Assembly. As a result, the total long-term costs of  the reform efforts, including the U.S. government’s share, remain unclear.  Moreover, the UN currently has no formal plan to evaluate the  effectiveness of its management reform efforts to determine whether they  have achieved the goals set out in the 2005 World Summit outcome  document.

		Administrative Policies and Procedures Continue to Complicate Human Resource Reform Efforts

Administrative policies and procedures, such as staff regulations and rules  that are directed by the General Assembly, continue to complicate and  sometimes restrict the process of implementing certain human resources  initiatives. Such guidance, some of which has been in existence for  decades, is part of the UN’s existing resource management framework  that, according to the Secretary-General, still lacks flexibility and is largely  headquarters-based, though more than half of the UN’s staff are currently  serving in the field. Although the Secretariat has made progress on some  administrative reform initiatives relating to human resources and  information technology, it has not addressed several other administrative  policies and procedures issues, including conducting a one-time staff  buyout and outsourcing and telecommuting for certain administrative  services, such as payroll processes, staff benefit administration, and  information technology support. As we discussed in our October 2006  report, the overall restrictiveness of these policies and procedures  continues to complicate the management reform process.

		Competing Priorities Slow UN Management Reform Efforts

Since our October 2006 report, competing priorities within the Secretariat  and General Assembly have limited the capacity of General Assembly  members to address the remaining management reform issues. In  February 2007, for example, several procurement-related reform issues,  such as clear lines of responsibility and accountability, delegation of  authority, and internal controls, were not taken into consideration by the  General Assembly during the spring 2007 session, as planned. The General  Assembly did not address these issues because the new Secretary-General  concurrently proposed a reorganization of the DPKO, which absorbed  much of the General Assembly’s attention throughout the session. As a  result, the Secretariat decided not to issue several procurement reports  during the spring 2007 session, without which member states told us they  were unable to formally consider certain procurement-related reform  issues.

	Conclusions

Reforming the management of the United Nations has been a priority of  the U.S. government for many years, as long-standing weaknesses and  inefficiencies in UN management functions have persisted. Although there  has been progress in implementing several components of the 2005 reform  agenda, some key components remain to be implemented. Completion of  the reform agenda will require overcoming several factors, particularly  disagreements among member states regarding how to achieve the goals  they agreed to at the 2005 World Summit. Some past reform efforts remain  incomplete because they did not get sustained and broad support of  member states. The current effort faces this same risk. Moreover, while  implementation of the reform agenda is a necessary element in meeting  the goals of the 2005 World Summit outcome document, it is not in itself  sufficient. Successful management reform requires that its components  are ultimately effective in modernizing the management functions of the  United Nations.

	Recommendation for Executive Action

To encourage UN member states to continue to pursue the reform agenda  of the 2005 World Summit, we recommend that, as management reforms  are implemented over time, the Secretary of State and the U.S. Permanent  Representative to the UN include in State’s annual U.S. Participation in  the United Nations report an assessment of the effectiveness of the  reforms.

	Agency Comments and Our Evaluation

We requested comments on a draft of this report from the Department of  State and the UN Secretariat. State’s comments are reprinted in appendix  II, along with our responses to specific points. The UN Secretariat did not  provide written comments.
State endorsed the main findings and conclusions of our report and noted  that our assessment of UN progress on management reform efforts was  accurate and balanced. State also agreed fully with the need to keep  Congress informed of the effectiveness of management reforms, adding  that the department will continue to monitor and inform Congress, as we  recommended. In addition, State agreed with us that more could be done  to ensure credible oversight at the UN. Furthermore, State noted that we  correctly recognize the need for the UN to establish a formal internal  control framework.
State did not agree with our statement that successful whistleblower  protections cannot be established without substantial reform of the UN’s  internal justice program. During our review, we found that UN and  nongovernmental organization staff had concerns about weaknesses in the  UN internal justice system and the potential impact of these weaknesses  on the implementation of a successful whistleblower protection policy. We  agree with these concerns. State also notes that the General Assembly’s  approval of the creation of an independent bid protest system was a  critical first step toward enhancing transparency in the UN’s procurement  award process. However, per our methodology, we categorize this reform  effort under “little or no progress” because there was evidence that few or  no steps had been taken towards actual implementation of the system.   State said it understood that this assessment was consistent with our  evaluation methodology.
State and the UN Secretariat provided technical comments that we have  incorporated into the report, as appropriate.
We are sending copies of this report to interested congressional  committees, the Secretary of State, and the U.S. Permanent Representative  to the United Nations. We will also make copies available to others upon  request. In addition, the report will be available at no charge on the GAO  Web site at http://www.gao.gov.
If you or your staffs have any questions about this report, please contact  me at (202) 512-9601 or melitot@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made contributions to this report are listed  in appendix V.

Appendix I: Scope and Methodology

To identify and examine the progress of UN management reforms, we  reviewed key documents proposing United Nations (UN) management  reforms and interviewed officials from several UN departments in New  York. We obtained and reviewed official reports of the Secretariat and the  Office of Internal Oversight Services (OIOS), Advisory Committee on  Administrative and Budgetary Questions (ACABQ) documents, General  Assembly resolutions, Secretary-General bulletins, Web sites, related  budget documents, and statements from UN officials. We also interviewed  senior officials from UN departments in New York City. Specifically, we  met with officials from the General Assembly Office of the President, the  Office of the Deputy Secretary-General, the Department of Management,  and OIOS. During the course of our review, we discussed the status of UN  management reforms with officials from the Department of State in  Washington, D.C., and the UN in New York. We also met with  representatives from 17 of 192 member states representing various  geographic regions, including Africa, Asia, Europe, the Middle East, North  America, and South America, to obtain a balance of views on the most  critical challenges to reforming UN management.
We selected management reform issues in the key areas of ethics,  oversight, management operations of the Secretariat, and review of  programs and activities (known as mandates) to examine in more detail.  We determined that these were the key areas of management reform  through our review of UN documents and our discussions with UN and  U.S. officials. We focused our work on management reforms that began in  2005 and did not specifically address the 1997 and 2002 reform agendas.  The 2005 reforms applied to the Secretariat and the UN’s governing bodies,  including the General Assembly, the Economic and Social Council, and the  Security Council. We did not include in our review reforms targeted at UN  specialized agencies or UN funds and programs; we also excluded efforts  such as the UN Peace Building Commission and Security Council and  governance reforms. We did not evaluate the effectiveness of the reform  efforts because of the recentness of their implementation.
To assess the progress of the UN reform efforts we reviewed, we  developed the following three categories:    Little or no progress: There is evidence that few or no steps have been  taken on the reform effort.
Some progress: There is evidence that some steps have been taken on the  reform effort, while others remain.
Substantial progress: There is evidence that the reform effort has been  mostly or fully implemented.
During our review, we determined which category of progress to assign to  each reform effort based on documents we collected and discussions we  had with State, UN, and other officials. After we made our initial  assessments of progress, three other GAO staff members not involved in  this review used the evidence and the categories to make their own  assessments independently of each other. These staff members then met  with each other to reconcile any differences in their initial assessments.  Finally, they met with us and confirmed that we were all in agreement on  our assessments.
To identify factors slowing the progress of the UN reforms we examined,  we reviewed reports and documentation of the Secretariat, General  Assembly, OIOS, and the ethics office. In addition, we spoke with UN  officials in New York. These included officials from the Office of the  Deputy Secretary-General, the Department of Management, ACABQ, and  OIOS. We also met with representatives from several member states and  spoke with U.S. officials in Washington, D.C., and New York. We also  interviewed outside observers of the UN system, including  nongovernmental organizations and members of academia.
Many cost estimates for the proposed reform initiatives are preliminary,  and detailed longer-term cost estimates are being developed; therefore, we  did not analyze the assumptions underlying these estimates to determine  whether they are reasonable and reliable. However, we believe that the  cost estimates and the associated funds that the General Assembly has  appropriated to date for reform efforts are sufficiently reliable for the  purposes of this report.
We conducted our work from March to November 2007 in accordance with  generally accepted government auditing standards.

Appendix II: Comments from the Department of State

	GAO Comments

1.  During our review, we found that UN and nongovernmental  organization staff had concerns about weaknesses in the UN internal  justice system and the potential impact of these weaknesses on the  implementation of a successful whistleblower protection policy. We  agree with these concerns.  As we state in our report, without a fair  and impartial justice system that effectively executes corrective action  in cases of retaliation or threatened retaliation, staff may not submit  cases to the ethics office.  Also, the annual activities report of the  ethics office states that protection against retaliation is linked to the  internal justice system.    2.  State notes that the General Assembly’s approval of the creation of an  independent bid protest system was a critical first step toward  enhancing transparency in the UN’s procurement award process. Per  our methodology, approving the creation of a protest system, while  demonstrating intent, is not equivalent to actual implementation of the  system, which has yet to begin. We categorize this reform effort under  “little or no progress” because there was evidence that few or no  implementation steps had been taken.  As State notes in its comments,  our assessment that the UN has made little or no progress in  establishing an independent bid protest system for UN procurements is  consistent with our evaluation methodology.

Appendix III: Typical Management Reform Decision-Making Process for Issues Requiring General Assembly Approval

The management reform decision-making process at the UN involves  multiple entities. For example, when a management reform has budgetary  implications, the Advisory Committee on Administrative and Budgetary  Questions and the Administrative and Budgetary Committee (the Fifth  Committee) are involved in the process. The Advisory Committee on  Administrative and Budgetary Questions, a subsidiary organ of the General  Assembly, consists of 16 members appointed by the assembly in their  individual capacity. The functions and responsibilities of the advisory  committee include advising the General Assembly concerning any  administrative and budgetary matters referred to it. The Fifth Committee  is the General Assembly’s committee for administrative and budgetary  matters and is composed of all 192 member states. Figure 6 depicts the  typical management reform decision-making process at the UN for issues  requiring General Assembly approval.

Appendix IV: Funds Approved to Implement Certain Management Reform Initiatives, as of October 2007

We reported in October 2006 that the Secretariat’s estimated costs for  implementing certain management reform initiatives were approximately  $40 million. Since then, due to additional actions taken during the 61st  session, the Secretariat’s revised cost estimate, as of October 2007, had  risen by about $13 million to approximately $53 million, as shown in table  1 below.

Appendix V: GAO Contact and Staff Acknowledgments

	Staff Acknowledgments

In addition to the contact named above, Phillip Thomas, Assistant  Director; Sarah Chankin-Gould; Debbie J. Chung; Lyric Winona Clark; and  George Taylor made key contributions to this report. Michael Derr,   Etana Finkler, Grace Lui, Amanda Miller, and Jena Sinkfield provided  technical assistance.

Related GAO Products

United Nations Organizations: Oversight and Accountability Could Be  Strengthened by Further Instituting International Best Practices.  GAO-07-597. Washington, D.C.: June 18, 2007.
United Nations: Management Reforms Progressing Slowly with Many  Awaiting General Assembly Review. GAO-07-14. Washington, D.C.:  October 5, 2006.
United Nations: Weaknesses in Internal Oversight and Procurement  Could Affect the Effective Implementation of the Planned Renovation.  GAO-06-877T. Washington, D.C.: June 20, 2006.
United Nations: Oil for Food Program Provides Lessons for Future  Sanctions and Ongoing Reform. GAO-06-711T. Washington, D.C.: May 2,  2006.
United Nations: Internal Oversight and Procurement Controls and  Processes Need Strengthening. GAO-06-710T. Washington, D.C.: April 27,  2006.
United Nations: Funding Arrangements Impede Independence of  Internal Auditors. GAO-06-575. Washington, D.C.: April 25, 2006.
United Nations: Lessons Learned from Oil for Food Program Indicate  the Need to Strengthen UN Internal Controls and Oversight. GAO-06-330.  Washington, D.C.: Apr. 25, 2006.
United Nations: Procurement Internal Controls Are Weak. GAO-06-577.  Washington, D.C., April 25, 2006.
United Nations: Preliminary Observations on Internal Oversight and  Procurement Practices. GAO-06-226T. Washington, D.C.: October 31, 2005.
United Nations: Sustained Oversight Is Needed for Reforms to Achieve  Lasting Results. GAO-05-392T. Washington, D.C.: March 2, 2005.
United Nations: Oil for Food Program Audits. GAO-05-346T. Washington,  D.C.: February 15, 2005.

Summary:
Why GAO Did This Study

The United States has advocated reforms of United Nations (UN) management for many years. In October 2006, GAO reported that UN management reforms were progressing slowly and that many were still awaiting review by the General Assembly. For this review, GAO was asked to (1) determine the progress of UN management reform initiatives in five key areas--ethics, oversight, procurement, management operations of the Secretariat, and review of programs and activities (known as mandates)--and (2) identify factors that have slowed the pace of reform efforts. To address these objectives, GAO reviewed documents relating to UN management reform and interviewed U.S. and UN officials.

What GAO Found

The progress of UN management reform efforts has varied in the five areas that GAO reviewed--ethics, oversight, procurement, management operations of the Secretariat, and review of programs and activities (known as mandates). To determine the status of these reform efforts, GAO developed three categories of progress, defined as follows: (1) Little or no progress = Few or no steps have been taken; (2) Some progress = Some steps have been taken, while others remain; and (3) Substantial progress = The reform effort has been mostly or fully implemented. The ethics office has made substantial progress in staffing its office and implementing a whistleblower protection policy, as well as some progress in developing ethics standards and collecting and analyzing financial disclosure forms. Member states made some progress in improving oversight at the UN when they created an Independent Audit Advisory Committee, which is expected to be operational by January 2008. Additionally, the Office of Internal Oversight Services (OIOS) improved the capacity of individual divisions, including internal audit and investigations. However, UN funding arrangements continue to constrain the independence of OIOS and its ability to audit high-risk areas. Some progress has been made in the area of procurement, such as developing a comprehensive training program for procurement staff. However, the UN has made little or no progress in establishing an independent bid protest system. Some progress has been made in reforming management operations of the UN Secretariat, such as improving human resource functions and information technology. In contrast, little or no progress has been made in reforming the UN's internal justice system for resolving and adjudicating staff grievances and safeguarding the rights of staff members, certain budgetary and financial management functions, and the delivery of certain services. Finally, despite some limited initial actions, the UN's review of programs and activities (known as mandates) has not advanced due in part to a lack of support by many member states. Various factors have slowed the pace of UN management reforms, and a number of reforms cannot move forward until these factors are addressed. Four key factors that have slowed the pace include (1) disagreements among member states on the priorities and importance of UN management reform efforts, (2) the lack of comprehensive implementation plans for some management reform proposals, (3) administrative policies and procedures that continue to complicate the process of implementing certain complex human resource initiatives, and (4) competing UN priorities, such as the proposal to reorganize the Department of Peacekeeping Operations, that limit the capacity of General Assembly members to address management reform issues.