UNHCR's Proposed New Budget Structure
1. At the eleventh meeting of the Standing Committee (April 1998), a number of delegations asked that the issue of the distinction between General and Special Programmes be revisited and that the possibility of a unified budget be reviewed. From observations made by many delegations at the Standing Committee meeting, it was obvious that there was considerable unease and dissatisfaction with the distinction: General Programmes/Special Programmes. It was felt that with the trend in recent years to increase, for various reasons, the number of statutory activities (see paragraph 7 below for a definition of statutory activities) funded under Special Programmes, the original distinction, which was premised on the fact that General Programmes should cover all of UNHCR's statutory activities, had become blurred. A series of consultations with Executive Committee Members and Observers was launched on 4 June 1998. Three meetings (4 and 17 June, and 2 July) were held with some 35 interested Members/Observers. The consultations were chaired by Ambassador Björn Skogmo of Norway.
2. The consultations were guided by the following principle:
Whatever changes may be recommended, they should:
(a) Be perceived to constitute an improvement;
(b) Be helpful to the Executive Committee and member States by assisting oversight and providing greater transparency;
(c) Maintain the High Commissioner's flexibility of action;
(d) Not inhibit the capacity of donors to respond to fund raising initiatives;
(e) Be technically feasible; and
(f) Provide for streamlined reporting.
3. Throughout the consultations, a recurring theme was that although a new budget structure might provide greater transparency and, in relation to administrative and programme support costs, allow comparisons with the budgets of other agencies, it would not per se lead to greater, or more predictable resources for UNHCR. In other words, the discussions focused primarily on budget structure, rather than the related funding mechanisms.
4. In the course of the consultations, it was also confirmed that UNHCR should move towards adopting the agreed definitions of UNDP, UNICEF and UNFPA on "Management and Administration" and "Programme Support". It will be recalled that this issue had been the subject of a conference room paper (EC/47/SC/CRP.53) presented to the ninth meeting of the Standing Committee in 1997; this same paper was also the subject of observations by the ACABQ (A/AC.96/884/Add.3, para.29 refers).
5. The outcome of the consultations was a wide consensus on the proposed new budgetary format. It was understood that no formal decision would be taken on the matter until the Executive Committee had the comments of the Advisory Committee on Administrative and Budgetary Questions (ACABQ).
II. PROPOSED BUDGET STRUCTURE
6. The broad outlines of the proposed new budget structure can be seen in Annex 1. The following paragraphs are made by way of comment on the various elements of the proposal.
A. The Basic Principle
7. Basic to the proposed new budgetary structure is the concept of "statutory activities". The proposed new budget structure would embrace two broad categories: "Statutory Activities" and "Other Mandated Activities". The principal criterion for the inclusion of activities under "Statutory Activities" is that the activities relate predominantly to those covered by the Statute of UNHCR. Statutory activities can be described as those relating to the protection of, and assistance to, refugees and the pursuit of durable solutions (voluntary repatriation, local integration and resettlement). As regards activities related to voluntary repatriation, those considered as statutory activities are all those in the country of asylum and related to actual return, and those essential activities after return which are aimed at ensuring the success of the return. Some commentators describe statutory activities as the "mandated" or "mandatory" functions of UNHCR. The distinction is between activities on behalf of refugees under the Statute or Mandate of the Office (General Assembly Resolution 428 (V)) and other activities undertaken in the context of the High Commissioner's "Good Offices" functions (for example, on behalf of specific caseloads of internally displaced). These latter activities fall under the category "Other Mandated Activities", as these types of activities could be regarded as mandated in the broader sense of the term. The distinction between the two groups of activities is not one of legitimacy, but of nature.
8. If one looks at the evolution of the current categories "General Programmes" and "Special Programmes", it will be seen that an enduring criterion for inclusion of activities under General Programmes was that they were statutory activities (a further criterion for inclusion under General Programmes, based on programmatic considerations, is that the activities relate to situations which have stabilized). The problem of late has been the tendency of UNHCR to place statutory activities, principally for funding reasons, under Special Programmes. This has blurred the original logic for the distinction between the two categories of General and Special Programmes. The proposed new categories of "Statutory Activities" and "Other Mandated Activities", represent a return to the strict application of the norm whereby statutory activities determined which category of programmes a given operation would fall under. To reflect the intention to strictly adhere to this criterion in the future, it was felt that it would be better to leave behind the terminology "General Programmes" and "Special Programmes".
9. It should be noted, however, that in choosing which category to place a given operation, the criterion will be the predominant nature of the operation. In other words, "Statutory Activities" would embrace those operations which are predominantly of a statutory nature. For reasons of clarity of presentation, it is felt that it is better not to divide the caseloads in a given situation between "Statutory Activities" and "Other Mandated Activities". For this reason, Sri Lanka, by way of example, would be listed as "Other Mandated Activities", as the caseload is predominantly internally displaced.
B. A Unified Budget
10. Prior to, and in the course of, the consultations, frequent reference was made to the need for a "unified budget". What was meant by a "unified budget", however, was not spelt out.
11. The proposed budget structure (and also the current one) gives a comprehensive picture of all of UNHCR's activities/operations and the various trust funds. Where it represents an advance on the existing budget structure is that it places all statutory activities under one budgetary heading ("Statutory Activities") and ensures that statutory activities for a given caseload, for example Burundi refugees or returnees, are funded from one source of funds. It will be recalled that currently, a large portion of programmes related to voluntary repatriation are funded under Special Programmes. In this sense, one can talk about a unified budget, namely that all statutory activities are grouped together and are funded from the same source of funds. For the category of "Statutory Activities", and reflecting their underlying unity, the current provision whereby the High Commissioner is authorized to effect adjustments between the budgetary lines for these statutory activities, would continue. As is the case now for General Programmes, the High Commissioner would report on such adjustments to the subsequent session of the Executive Committee. It would be this category of activities ("Statutory Activities") which would be approved by the Executive Committee, as is currently the case for General Programmes.
12. The remaining activities ("Other Mandated Activities"), would function like separate trust funds with their own funding dynamic. As with Special Programmes today, it would not be possible to effect transfers between any of these funds (the exception being where this was done with the express consent of the donor(s) who had contributed to the fund from which a transfer was to be made). To ensure that there is a comprehensive picture of all activities being undertaken by UNHCR, activities/projects under the heading of "Other Mandated Activities" would be included in the budget presentation of the Programme of the High Commissioner. Given that these activities would be funded as separate trust funds, they would not be subject to the express approval of the Executive Committee. Nevertheless, they would be subject to review by the Executive Committee to ensure that they are consistent with the Statute of the Office of the High Commissioner and the High Commissioner's "Good Offices" functions as recognized, promoted or requested by the General Assembly, the Security Council or the Secretary-General, and are in accord with the relevant provisions of the Financial Rules for Voluntary Funds Administered by the High Commissioner for Refugees (A/AC.96/503/Rev.6).
C. Budgetary Definitions
13. Where possible, to ensure greater comparability of UNHCR's budget with those of other organizations, UNHCR has adopted agreed budgetary definitions common to parts of the United Nations system (UNDP, UNICEF, UNFPA). This is the case in relation to the definitions of "programme support", "management and administration" and "programme" which have been agreed to by UNDP, UNICEF and UNFPA (see document DP/1997/2, E/ICEF/1997/AB/L.3 and addenda 1 of 18 November 1996). (These definitions may be found in Annex 2.)
14. Following presentation of conference room paper EC/47/SC/CRP.53 to the Standing Committee at its ninth meeting in September 1997 on its proposal to introduce these new definitions, and the related comments of the ACABQ, UNHCR has undertaken preliminary, but extensive, work on the introduction of these new budgetary definitions as of the year 2000. It will be recalled that UNHCR currently categorizes its activities (and related posts, and non-staff costs) as either "Programme Delivery" (PD) or "Administrative Support" (AS) (see Annex 2 for these definitions). As part of its review undertaken in relation to the introduction of the definitions, UNHCR has applied the new definitions of "Programme Support" (PS), "Management and Administration" (MA) and "Programme" (P) to one large country operation (Kenya) and Headquarters. The outcome of this exercise is found in the various parts of Annex 3.
15. Of the tables in Annex 3, the first two tables look at Headquarters. The first table shows the budgetary implications of the different ways of categorizing posts. The table shows the budgetary implications according to the current distribution of posts under the categories AS (Administrative Support) and PD (Programme Delivery); it also shows the results of the reclassification of posts according to the new definitions of MA (Management and Administration) and PS (Programme Support) according to two "options"; "Option A" reflects a recategorization on a "post-by-post" basis and "Option B" is based on a categorization based on the primary function of the unit where the post is situated. It should be noted that UNHCR currently categorizes posts (and related expenditure) based on the functions of each individual post. UNDP, UNICEF and UNFPA categorize posts based on the unit (that is to say, the unit's primary functions) where a post is found. The second table in Annex 3 shows the distribution of posts at Headquarters according to current definitions (AS: Administrative Support and PD: Programme Delivery), as well as according to "Option A" and "Option B". The third table in Annex 3 shows the budgetary consequences of the application of the new definitions, including that of "Programmes" to a sample field location (Kenya). The fourth table in Annex 3 reflects an analysis of posts in the sample field location (Kenya). It is proposed that UNHCR, for reasons of budgetary harmonization and comparability, will move to the classification of posts (and expenditure) based on the primary function of the unit where a post is found.
16. Currently UNHCR has three types of reserves: the Emergency Fund, the Voluntary Repatriation Fund and the Programme Reserve. Each is governed by detailed criteria for use as set out in the Financial Rules for Voluntary Funds Administered by the High Commissioner for Refugees (A/AC.96/503/Rev.6) Art VI (see Annex 4). These Funds and the Programme Reserve give the High Commissioner a high degree of flexibility in responding to changing refugee/returnees situations. It was with this intention that the Executive Committee last reviewed the articles governing the Funds and the Programme Reserve in 1995 and modified the Financial Rules accordingly.
17. Currently, the Emergency Fund has a ceiling of $25 million. The level of the Voluntary Repatriation Fund is set at a base of $ 20 million and may extend up to an amount equivalent to 10per cent of the total budget estimated for voluntary repatriation for the preceding year; for the current financial year, its level has been set at $ 20 million. The Programme Reserve is constituted at an amount between 10 and 15 per cent of the programmed activities under the Annual Programme for a given year; for the current financial year the Programme Reserve has been set at $35.9 million (namely 10 per cent of programmed activities).
18. The question was raised in the consultations as to whether there should be only one Reserve. The Financial Rules would need to be amended accordingly to establish criteria for the use of the new Reserve. On the other hand, it could be argued that the purpose of the existing Funds and the Programme Reserve are sufficiently distinct to leave them as they are. It may be necessary, however, if the new proposed budgetary structure is adopted, to review the Financial Rules governing the level of the Programme Reserve, as the volume of programmed activities could be of the order of $ 500 million (excluding various reserves amounting to $80 million).
19. Reference was also made in the consultations and in related consultations on reintegration as to the merits of creating a Reintegration Trust Fund whose purpose would be to fund those activities related to the return of refugees to their country of origin which would not be covered by the basic reintegration initiatives under "Statutory Activities". The activities envisaged for funding would be of a mid-term nature and relate to a range of sectors, such as shelter, health and education, whose purpose would be to anchor the return of the refugees through a range of sectoral initiatives in favour of the community to which the refugees return.
E. Resource Mobilization
20. The application of the principle whereby activities that are predominantly statutory will be placed in the category "Statutory Activities" will mean a significant increase in the budgetary level of this category to some $ 600 million, as compared to the current level of General Programmes of $429 million. (Annex 5 shows that currently the volume of statutory activities currently under Special Programmes is some $ 165 million; the application of the rule concerning statutory activities would see these activities, together with those currently under General Programmes, move to the new category of "Statutory Activities".)
21. Another related issue is the predictability of funding. One of the main reasons why UNHCR moved, in recent years, statutory activities to Special Programmes, was that with the overall growth in volume of total statutory activities, it was felt that the level of General Programmes should be kept to a level that would be accepted by the Executive Committee as one that was fundable. The level of General Programmes (unlike that of Special Programmes) was approved by the Executive Committee. This carried with it a presumption of their funding. The funding of General Programmes was a priority for UNHCR. It at least represented for UNHCR, in the volatile climate in which the Office worked, some predictability of funding. Recent trends in the funding of General Programmes, however, have undermined these presumptions.
22. This increased volume of activities under "Statutory Activities" could present a particular challenge from the point of view of resource mobilization. On the other hand, it could be argued that the new budget structure, with caseloads/activities clearly identified under "Statutory Activities", would attract more contributions (albeit earmarked). As this category would represent UNHCR's priority category for funding purposes, UNHCR would hope that this would be reflected in donor contributions. As to the programmes listed under "Other Mandated Activities", it is also possible that these might attract increased resources from other donor sources; for example, from Environment or Development Ministries.
23. In the consultations, the opinion was expressed that the new budgetary format might lead to greater earmarking. There was the suggestion that earmarked funds should attract (or normally attract) a charge to ensure that there are sufficient un-earmarked funds available not to have an adverse effect on the management of UNHCR's programmes.
24. To assist in its resource mobilization, UNHCR produced in the course of 1997 two volumes which gave details of its General and Special Programmes. UNHCR intends to produce in December 1998, one Global Appeal document for its planned activities in 1999. UNHCR is also exploring ways to link the Pledging Conference to the approval of its budget by the Executive Committee and/or the issuance of the Global Appeal. It is imperative for UNHCR, with negligible carry-overs foreseen for its programmes in 1999, that the Pledging Conference produces a significant level of pledges for UNHCR to begin all its programmes on 1 January 1999.
Annex 1 PROPOSED BUDGET STRUCTURE PROGRAMME OF THE HIGH COMMISSIONER1
(A) STATUTORY ACTIVITIES2 (Core Budget)
1. REGIONAL OPERATIONS3
Regional status determination for Rwandans
Programme Support (Bureaux)6
- Programme Support
Democratic Republic of the Congo
- Programme Support
- Programme Support
- Programme Support
United Republic of Tanzania
- Programme Support
Congolese (of the Democratic Republic of the Congo) Refugees/Returnees
Democratic Republic of the Congo
Republic of the Congo
United Republic of Tanzania
Democratic Republic of the Congo
Sierra Leonean Refugees/Returnees
ASIA AND THE PACIFIC
CENTRAL ASIA, SOUTHWEST ASIA NORTH AFRICA AND THE MIDDLE EAST
2. GLOBAL OPERATIONS8
- Promotion of Refugee Law
- Standards and Legal Advice
- Protection Training and Support
- Programme Coordination
- Programme and Technical Support
- Supply and Transport
G Supply Chain
Career Management System
3. MANAGEMENT AND ADMINISTRATION10 (of which some $ 20 million per year is funded from the United Nations Regular Budget)
- Executive Direction
- Inspection and Evaluation
- Inter-Organization Affairs and Secretariat Services
- Documentation and Research
- Public Information
- Financial and Information Services
- Human Resources Management
- Building Services
VOLUNTARY REPATRIATION RESERVE
5. TOTAL (A) $ ?????????
(B) OTHER MANDATED ACTIVITIES13 (Resourced through Special Appeals and Trust Funds)
1. SRI LANKA
2. RUSSIAN FEDERATION (CHECHNYA)
3. CRIMEAN TATARS
4. SHELTER (BOSNIA AND HERZEGOVINA)
6. DAFI (TERTIARY EDUCATION)
7. MANAGEMENT AND ADMINISTRATION (for the above mandated activities at Headquarters)
Annex 2 PROPOSED NEW DEFINITIONS
The following definitions of "Management and Administration", "Programme Support" and "Programme" are taken from documents DP/1997/2 and E/ICEF/1997/AB/L.3, pages 41 and 42:
Management and Administration of Organization: Organizational units whose primary function is the maintenance of the identity, direction and well-being of an organization. This will typically include units that carry our the function of executive direction, organizational policy and evaluation, external relations, information and administration.
Programme Support: Organizational units whose primary function is the development, formulation, delivery and evaluation of an organization's programmes. This will typically include units that provide backstopping of programmes either on a technical, thematic, geographic, logistical or administrative basis.
Programme: Direct inputs needed to achieve the objectives of a specific project or programme for development cooperation. This may typically include experts, support personnel, supplies and equipment, subcontracts, cash assistance and individual or group training.
For ease of comparison, the current UNHCR definitions of "Administrative Support", "Programme Delivery", and "Programme" are reproduced below
Programme Delivery (PD) activities cover the broad spectrum of UNHCR activities ranging from the provision of international protection, the promotion or search for durable solutions through to the provision of the different forms of material assistance.
Administrative Support (AS) activities are those activities whose function it is to support the "Programme" of the Office of the United Nations High Commissioner for Refugees. Such support of "programme" activities, in the form of backstopping, is primarily through the provision of common services such as finance, personnel, information systems, telecommunications and general services, and through a range of other activities such as evaluation, administration, training, etc.
Programme: A set of activities directed towards the attainment of one or more UNHCR-defined objectives.
(Note: Statistical and financial tables not included in this online version. See your nearest UN Depository Library.)
Annex 4 Article 6 - FUNDS AND RESERVES
6.4 The Emergency Fund is established to provide:
(a) financial assistance to refugees and displaced persons in emergency situations for which there is no provision in the programmes approved by the Executive Committee;
(b) such additional administrative expenditure resulting from those emergencies as cannot be met from the regular budget, pending action by the Executive Committee or the General Assembly.
6.5 The High Commissioner may allocate from the Emergency Fund up to $ 25,000,000 annually, provided that the amount made available for one single emergency shall not exceed $8,000,000 in any one year.
6.6 The Emergency Fund shall be maintained at not less than $ 8,000,000 by replenishments from the Working Capital and Guarantee Fund and by voluntary contributions.
6.7 An Emergency Fund allocation may be cancelled if sufficient funds to a given appeal are later received;
6.8 The High Commissioner shall report to the Executive Committee at each session on the use made of the Emergency Fund.
Voluntary Repatriation Fund
6.9 The Voluntary Repatriation Fund established to provide financial assistance, under General or Special Programmes, for voluntary repatriation operations for refugees may be used for the following purposes:
(a) to fund planning of repatriation, especially in regard to the necessary measures to be taken on behalf of returnees in their country of origin;
(b) to fund preparations in the country of asylum for voluntary repatriations not otherwise provided for, and activities related to actual return;
(c) to provide supplementary funding for voluntary repatriations, including those which continue to have the remainder of their needs programmed under Special Programmes.
6.10 The High Commissioner may allocate annually from the Voluntary Repatriation Fund up to the amount approved by the Executive Committee for the Voluntary Repatriation Fund under the General Programmes for that year according to the provisions of art.6.9, provided that in a given year, the allocation for any one voluntary repatriation operation does not exceed $ 10.0 million.
6.11 The Voluntary Repatriation Fund shall be established at a level to be determined by the Executive Committee. This level shall have a base of $ 20,000,000 and may extend up to an amount equivalent to 10 per cent of total budgetary estimates for voluntary repatriation for the preceding year.
6.12 A Voluntary Repatriation Fund allocation may be cancelled if sufficient funds to a given appeal are later received;
6.13 The High Commissioner shall report to the Executive Committee at each session on the use made of the Voluntary Repatriation Fund.
6.14 A Programme Reserve shall be constituted at an amount between 10 and 15 per cent of the programmed activities (the country/area programmes, the Headquarters and Other Programmes) under the Annual Programme for a given year.
6.15 The Programme Reserve may be used for the following purposes:
(a) to cover unexpected increases in the costs of projects financed from the current or previous years' Annual Programmes, or from an Emergency Fund allocation made in a current or previous year;
(b) to meet the cost of modifications to current year projects under the Annual Programme that may be necessary to achieve the approved project objectives;
(c) to increase existing allocations to meet needs resulting from a new influx of refugees belonging to a group already receiving assistance under the current year Annual Programme;
(d) to complement Special Programme Funding for refugee situations, provided that the total of all such allocations does not exceed one third of the Programme Reserve in a given year; and
(e) to increase, as required, with the Executive Committee's approval, the Field Staff Housing and Basic Amenities Fund.
6.16 A Programme Reserve allocation may be cancelled if the funds have not been obligated at the end of the year.
(Note: Statistical and financial tables not included in this online version. See your nearest UN Depository Library.)
1 Programme of the High Commissioner: this will provide a description of all activities and related objectives to be undertaken by UNHCR.
2 Statutory Activities would embrace those operations which are predominantly of a statutory nature. For reasons of clarity of presentation, it is felt that it is better not to divide the caseloads in a given situation between "Statutory Activities" and "Other Mandated Activities". For this reason, Sri Lanka, by way of example, would be listed as "Other Mandated Activities" as the caseload is predominantly internally displaced. Paragraph 6 of the document distributed to the consultations on UNHCR's budget structure entitled Note: Background Information and Issues for Consideration, provides a definition of "statutory activities". It is recognized that the identification of activities in countries of return deemed to be statutory will be one of the outcomes of the consultations on reintegration. Without wishing to prejudge these outcomes, it will be noted, however, that as an example, listed under "Other Mandated Activities" is "Shelter (Bosnia and Herzegovina)"; it is conceivable, however, that some shelter programmes will be so inextricably linked to a return movement and be of such a modest nature, that they could be considered statutory. A decision on this might need to be made on a case by case basis. Further guidance on this point should emerge from the consultations on reintegration.
3 The entries listed under "Regional Operations" are by way of example; they do not constitute a comprehensive listing. Operations are considered from a "situational" viewpoint - namely a caseload or "theme", such as the promotion of refugee law (for further clarification, see paragraph 6 of the Project Delphi Plan of Action, EC/46/SC/CRP.48). Caseloads could be in several neighbouring countries. This would provide for greater flexibility in the use of resources for the caseload.
4 Regional Projects provide a listing of those activities which are not specific to a particular caseload or theme.
5 Under each caseload or theme, the Objectives/Sectors would be identified and described in both narrative and budgetary terms.
6 "Programme Support" is used according to the definition agreed by UNDP, UNICEF and UNFPA (details can be found in EC/47/SC/CRP.53).
7 "Programme" posts and associated costs, as per the definition agreed by UNDP, UNICEF and UNFPA, will be found in each of the country programmes.
8 Some UNHCR activities will be of a global nature, cutting across, or in support of, different operations. They may also be programmed and budgeted centrally for budgetary and management purposes. These will be presented under "Global Operations". Activities on behalf of women and children which have not yet been mainstreamed under operations, but which are intended to promote this programme priority, will also be listed here.
9 "Programme Support", which is of a global nature, will be listed here. In accordance with the definitions agreed by UNDP, UNICEF and UNFPA, these will comprise the units at Headquarters in the Divisions of International Protection and Operational Support, as well as global projects which support the regional operations.
10 "Management and Administration" lists those units at Headquarters which fall within the definition agreed by UNDP, UNICEF and UNFPA.
11 These Reserves correspond to the current Programme Reserve, and the Emergency and Voluntary Repatriation Funds, which are described in the Financial Rules. It is envisaged that the current Financial Rules would broadly apply to these three new reserves. For example, the Programme Reserve would be 10 to 15 per cent of total Operations and Programme Delivery; the Emergency Reserve would be set at $ 25 million and the Voluntary Repatriation Reserve at $ 25 million. The relevant provisions covering these Reserves are found in Article 6 "Funds and Reserves" of the UNHCR Financial Rules (A/AC.96/503/Rev.6).
12 Emergency Operations, falling under Statutory Activities and which occur between sessions of the Executive Committee, would at first be handled through an allocation from the Emergency Reserve. If the size of the emergency operation exceeded the capacity of the Emergency Reserve, a Special Appeal would be launched to meet the needs, and would be reported under this section to meetings of the Standing Committee. At the next session of the Executive Committee, the operation would be incorporated under Statutory Activities.
13 Other Mandated Activities would cover those activities which are mandated by the Secretary-General, a General Assembly resolution, or by Governments and which, while consistent with the work of UNHCR and of a legitimate nature, are not regarded as statutory. These would be resourced through Special Appeals and Trust Funds; each of them would operate in an independent manner.
14 The Programme Support element within each of the activities listed under "Other Mandated Activities" would contain both a Field and Headquarters component to ensure that there is a proper charge to the activity for the costs of Programme Support from Headquarters.
15 New systems being developed by UNHCR within the context of the new Operations Management System will allow for the easy retrieval of information which presents a different view of activities being undertaken by UNHCR. Reporting in this section would allow member States to view specific elements (for example, total protection activities, total Programme Support, total Headquarters, a breakdown by country which combines the budgets for different caseloads).