Statement to the 68th Session of the Executive Committee of the High Commissioner's Programme
Introductory remarks for item 5b: Programme budgets, management, financial control and administrative oversight
Mister High Commissioner,
Given what is happening in the world today, the High Commissioner outlined Monday the need for the international community and UNHCR in particular to ready ourselves for the future and accelerate the shift in the way we respond to forced displacement.
As we test the Comprehensive Refugee Response Framework, a fundamental change is under way. For our part, UNHCR is gearing up to ensure that we, together with host and donor countries, are ready to sustain this significant shift.
The High Commissioner mentioned several strands of reform which have been completed or are ongoing within UNHCR, including the strengthening of oversight, reforms of our human resources system and the professionalization of our Evaluation Service, and I want to take this opportunity to elaborate on aspects of these.
The reforms of oversight bodies initiated in mid-2016 have led to significant changes in the functioning of our oversight bodies themselves and the manner in which management follows-up on the findings of these bodies.
The Inspector General, Ms. Karen Farkas, will address you later and provide additional details on the implementation of oversight reforms through changes in her office, including as concerns the coordination of the internal audit function. We have ensured that changes to our suite of oversight bodies are informed by advice provided by our Independent Audit and Oversight Committee, whom we thank, once again, for its wise counsel.
Critically, these changes were brought about with the aim of improving advice provided to the Organization’s senior management. As part of this effort, the Internal Compliance and Accountability Committee (ICAC) was dissolved in mid-2017 and the body’s functions have now been absorbed by the Senior Management Committee through periodic strategic reviews. This offers the Senior Management Committee with greater information about pending oversight recommendations, the root causes of oversight issues raised, and emerging risks in order for us to take necessary decisive action to strengthen management and support operations, and ensure we continue to be strong agents for the resources you have entrusted.
I provided an update to the Standing Committee in June of this year on allegations of misconduct received against a number of staff serving in Kakuma, Kenya, and our response to these.
Five UNHCR staff members were immediately placed on administrative leave and investigations conducted by the Inspector General’s Office have led, to date, to the termination of one staff member for misconduct while two other staff members have resigned. The disciplinary process which has been engaged for the two other staff members should be completed imminently. Furthermore, UNHCR has, in coordination with UN headquarters, referred three of the staff members to the Kenyan police and is maintaining regular contact with local authorities on the matter.
Let me reiterate that we remain vigilant and are firmly committed to identifying weaknesses in our delivery systems and proactively addressing these. In addition to steps taken to investigate the specific allegations, UNHCR launched a quality and integrity assurance review of its protection delivery in Kakuma, including a focus on resettlement processing, refugee reception, registration and data management. We also commissioned an independent management review of our operation in Kenya to better understand the circumstances which may have contributed to the situation, identify lessons learned and make recommendations not only for the Kenya operation, but also for other countries where we are engaged in complex, difficult, and protracted situations.
We have, since then, created a unit in our Branch Office Nairobi which, headed by a senior manager reporting directly to the Representative, focusses on risk management, compliance and quality assurance. This unit effectively constitutes the vanguard of the High Commissioner’s Risk Management 2.0 initiative.
While still in its initial phase, this initiative has already allowed us to make considerable strides in Kenya. Significant efforts are underway to strengthen organisational structures; put in place procedural and systems controls to better prevent fraud and corruption; improve our response to allegations, and; address, to the extent possible, the root causes. We are doing so in a highly collaborative manner, working with NGO partners, other UN agencies, major contractors, government entities and, most importantly, with refugees and community leaders.
Finally, the changes in our Evaluation function, and the professionalization of our Evaluation Service, will contribute to ensuring that UNHCR becomes an organisation that is intentional and systematic in the use of evidence in its programming, advocacy and resource mobilisation; and transparent, reflective and comfortable in learning from failures. Ms. Ritu Shroff, the new head of our Evaluation Service, who you will hear from later, has developed an ambitious strategy which will improve UNHCR's evaluation capacity while ensuring greater coverage and utility of evaluations. This, together with changes to oversight mechanisms, and reinforced risk management, will ensure that the organisation’s programmes have a greater and more lasting impact on refugees and displaced populations and that all necessary controls and oversight are in place.
UNHCR’s workforce is at the heart of our ability to deliver protection and solutions for refugees and others we serve, whether directly or in collaboration with our nearly 1,000 partners. Considerable change was introduced by the new Recruitment and Assignments policy which came into force in August. These changes aim to enhance our capacity to attract and retain a workforce which meets the organisation’s current and future needs and commits to serving in a variety of locations, in particular hardship, high-risk and non-family duty stations.
In parallel, we have taken steps to further reinforce strategic workforce planning to ensure we have the right people in the right places and have also engaged in leadership and succession planning, as well as taken steps to building a senior external leadership pipeline.
We have redoubled efforts to ensure that UNHCR’s workforce is as inclusive and diverse as possible, including by intensifying the incorporation of an Inclusion, Diversity, and Gender approach in the change management process. The stronger integration of gender and diversity considerations in the assignments policy is one outcome of this, as is the use of data on gender and geographic diversity to develop dashboards for senior managers to monitor progress in this area.
These efforts are driving a positive trend in gender diversity across the organisation and the representation of female staff members at senior levels. As a result of these, we saw the number of female staff at the P5 level increase by 3 per cent from late 2016 to mid-2017 and those at other levels follow, by and large, the same positive trend. While the adjustment constituted by the introduction of the rank-in-job assignments policy, and the resulting advancement of personnel previously serving at a higher grade, has had a detrimental effect on the numbers related to female representation among some P and D categories of staff in the short term, we are confident that our efforts will continue to progress and that we successfully continue to move, in the medium term, towards an increasingly gender-balanced workforce.
Ultimately, these various reforms come together under the change process which was initiated by the High Commissioner through the independent review of the design, structure and processes of our headquarters. The extensive changes being brought about through this approach, under the coordination of Ms. Daisy Dell, will ensure that UNHCR becomes even more nimble and responsive, better able to adapt to new challenges and opportunities as well as constraints, and to innovate both our thinking and way of working.
Turning to financial matters, I wish to thank our colleagues from the Office of Internal Oversight Services, the Board of Auditors, and the Independent Audit and Oversight Committee for their invaluable contributions to the organisation, and for the unfailingly collaborative manner in which they do so.
In their audit report for 2016, the Board of Auditors confirmed that UNHCR remained in a strong financial position and issued a clean unqualified audit opinion, though it noted the challenging environment in which we operate, including as a result of the significant funding gap and high level of earmarked donations we receive for specific situations.
The Board issued 17 new recommendations, mainly referring to the need for additional controls and monitoring steps in the process of financial statement preparation, the need to consider the possibility of long-term investment of after-service health insurance (ASHI) funds, and enhancing the risk-based monitoring of projects implemented through partners. We are taking steps to address these recommendations and remain fully committed to addressing the Board’s recommendations in a timely manner.
The Office of Internal Oversight Services completed 34 audits in the reporting period and issued, as part of these, 161 recommendations, eight of which were critical. While information shared in the lead up to this Executive Committee meeting show five critical recommendations with overdue implementation, I am happy to say that one of these critical recommendations (related to documentation for vehicles provided to partners under a Right of Use Agreement) has since been closed. We are also redoubling efforts to ensure the closure of other critical recommendations.
Finally, I want to touch briefly on our budget in anticipation of item 7 on the agenda. Our budget for the coming biennium, which I am happy to say was positively received by the Advisory Committee on Administrative and Budgetary Questions (ACABQ), reflects comprehensive needs as assessed based on planning assumptions and our capacity to deliver in response to the most likely scenarios regarding the people we serve worldwide.
In this process, we have had to contend with some levels of uncertainty, including as relates to the possible budgetary implications of increased engagement with development and humanitarian partners in the context of the Comprehensive Refugee Response Framework. The full budgetary impact of changes in our oversight bodies and Evaluation Service in the current year were unknown when the 2018 budget was finalised. The evolution of the workload in the Inspector General’s Office will be reviewed prior to the beginning of 2018 to determine and update budget requirements. Similarly, the detailed work-plan of the Evaluation Service will also lead us to reassess the nature and extent of resources required. Other variables which were reflected in this budget are anticipated cost savings where prior investments in operations allow us to reduce our operational footprint or reduce the cost of running operations, and; the cost implications of the security environment and ensuring access to persons of concern. These contributed to variations in budget levels at the regional level at the time of planning and are expected to evolve in line with the situation on the ground.
The growth of our budget over recent years was noted by a number of member states during our most recent Standing Committee meeting. I must stress that this is a natural reflection of increasing displacement worldwide, and the growing requirements to address this in line with the Comprehensive Needs Based budget this Committee asked us to construct in 2009. In the absence of political solutions to conflicts, and an end to displacement, we do not foresee a significant reduction in needs in the short term, but continue to look for ways that we can use savings from more efficient practices, including those implemented as a result of the Grand Bargain, to address unmet needs.
We also acknowledge the impact that budget reductions will have on some operations. In our detailed planning process, we look closely at the impact that previous investments will have on our coming year’s budget in addition to other factors. This remains a dynamic and sometimes imperfect process given the difficulty of predicting population movements so far in advance. However, we build-in an ongoing, intensive, prioritisation process with significant input from our operations on the ground, particularly with regard to our ability to deliver and needs on the ground, and continue to adjust requirements as necessary.
With the funding gap an unfortunately constant feature in our discussions in this hall, we continue to seek diversity in our funding sources and continue investments in fundraising from the private sector. We remain committed to this approach and are increasing our investment in private sector fundraising in 2018 to grow the close to USD 400 million revenue raised this year to ultimately reach our target of USD 1 billion in revenue from private sector sources.
The record-high levels of funding your governments and the private sector have provided us this year reflects the considerable confidence you have in UNHCR. Many of you have emphasized this week your commitment to unearmarked and multi-year support to the organization, which is particularly valuable for us to respond to a complicated and dynamic operating environment. We are most grateful for this and committed to ensuring that UNHCR is best suited to meet the needs of refugees, stateless, and displaced populations, both today and in the future. This is reflected in our commitment to change. A commitment to ensure that the organisation remains agile and nimble, able to protect and find solutions, respond to new and emerging needs, and do so in a manner which is both inclusive and empowering.