Monitoring Policy Making at the United Nations |
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United Nations Financial Crisis GAO News News Bulletin (18 June 1998)
US General Accounting Office Report Recognizes Arrears as Primary Cause of Financial Problems at the UN
A report by the U.S. General Accounting Office was issued today in response to concerns raised by members of Congress about (1) the U.N.'s financial status and (2) the impact of U.S. arrears on selected U.N. decisions, including U.N. resolutions dealing with Iraq and U.S. efforts to secure a change in its regular budget assessment rate. The report was requested by Senator Jesse Helms, and Representatives Benjamin Gilman and Harold Rogers.
The report makes three important points:
U.N. data concerning arrears is valid
It supports U.N. numbers on arrears and on how much the United States actually owes the U.N., thereby discrediting the position held by many members of Congress that the U.S. should owe less than the U.N. has claimed because of peacekeeping debts owed to the U.S.Late and unpaid assessments are the primary cause of the U.N.'s financial crisis
The report states that "the U.N.’s financial problems have been primarily caused by the accumulation of unpaid assessments and the late payment of assessments by a large number of members." Assessed contributions are due January 1st, but most member states make their payments late or incrementally throughout the year and some do not pay in full.
The report points out that since 1983 the U.S. has withheld payment until October of each year and has consistently failed to pay its dues in full. It acknowledges that the U.S.’ practice since 1986, of withholding part of its contributions until specific conditions have been met, "has exacerbated the problem." It also notes that of the countries in considerable arrears to the U.N., "according to a State Department official, only the United States has not paid its arrears because of policy reasons."
The report notes that U.N. regular budget programs are adopted by member states on the basis that all assessed contributions will be made on time and in full. When those same member states that approve the programs fail to pay, the U.N. is forced to borrow funds from peacekeeping accounts to maintain regular budget obligations. With the decrease in recent years of peacekeeping funds, this solution will no longer be possible. The report also notes that if member states were to demand the funds owed them by the U.N. for their peacekeeping contributions, the UN's already precarious financial condition would deteriorate even further.U.S. arrears have a negative effect on the U.S.' ability to further some of its positions
The report states that "the arrears problem has contributed to a difficult environment for the State Department and the U.S. Mission to operate in" and points to the increasing unwillingness of other member states to tolerate U.S. arrears.
On matters of the Security Council, while the report found that U.S. positions prevailed on decisions concerning Iraq, the Congo and the Central African Republic, U.S. arrears were brought up when negotiating resolutions on Iraq, and, according to U.S. officials, made their work more difficult. The report notes that a U.S. initiative to streamline administrative operations for a peacekeeping operation in Lebanon was defeated when U.S. arrears were discussed. According to State Department and U.S. Mission officials, discussions on other peacekeeping missions have also been interrupted by questions about U.S. arrears.
On decisions concerning U.N. reform and finance, the report states that "according to the U.S. Ambassador to the United Nations, U.S. arrears was the primary reason why the United States lost its seat on the Advisory Committee on Administrative and Budgetary Questions (ACABQ) in 1996." The report also notes that U.S. officials have been informed by representatives of other U.N. members that the U.S. will not regain the Advisory Committee seat until its arrears are paid in full.
The report also states that according to some State Department officials, the U.S. may have been able to reach its goal of reducing its U.N. regular budget assessment rate from 25% to 22% (a provision the U.S. Congress has insisted on), had it not been for the U.S. arrears. Major U.N. contributors were somewhat open to the possibility of a 22% cap as the maximum assessment for any individual U.N. member. Discussions with China were underway, but ended when U.S. legislation to clear the arrears was not enacted in 1997. The report indicates that one EU delegate stated that reassessment of 1998-2000 U.S. contributions would not take place until all arrears are paid.
The report also acknowledges that the United States could potentially lose its vote in the General Assembly if it does not legislate or pay an additional amount between $211 and $241 million by December 31, 1998.
The Department of State commented on the report saying that it was too narrowly focused on only selected activities and that the "loss of influence and prestige of the United States within all the bodies of the United Nations that has been caused by U.S. arrears" was not fully portrayed.
"The United Nations agreed with the factual information presented in the report, and reiterated its view that the U.N.'s financial situation is precarious and that borrowing from one account to cover deficits in another is imprudent.
Also see:
A copy of the GAO Report
Press Briefing by Under Secretary General Joseph Connor on the GAO report
A New York Times article on the report
