Distr.

GENERAL

DP/1999/28

11 August 1999

ORIGINAL: ENGLISH

Third regular session 1999

13-17 September 1999

Item 1 of the provisional agenda

REPORT ON THE ANNUAL SESSION

NEW YORK, 14-22 JUNE 1999

CONTENTS

I. ORGANIZATIONAL MATTERS

II. ANNUAL REPORT OF THE ADMINISTRATOR

III. UNITED NATIONS REFORM

IV. EVALUATION

V. COUNTRY COOPERATION FRAMEWORKS AND RELATED MATTERS

VI. INFORMATION AND COMMUNICATION STRATEGY

VII. RESOURCE MOBILIZATION

VIII. TECHNICAL COOPERATION AMONG DEVELOPING COUNTRIES

IX. UNITED NATIONS OFFICE FOR PROJECT SERVICES

XIV. FINANCIAL, BUDGETARY AND ADMINISTRATIVE MATTERS

X. INTERNAL AUDIT AND OVERSIGHT

XV. FIELD VISITS

XI. REPORT OF THE EXECUTIVE DIRECTOR FOR 1998

XII. WORK PLAN AND REQUEST FOR PROGRAMME EXPENDITURE AUTHORITIES

XIII. INFORMATION AND COMMUNICATION STRATEGY

XVI. OTHER MATTERS

DECISIONS ADOPTED

I. ORGANIZATIONAL MATTERS

1. The President, H. E. Mr. Asda Jayanama (Thailand), opened the meeting. He noted that the session was being held only two months after the special funding meeting that had taken place on 15 April. That meeting had underlined not only the very positive work of UNDP in many programme countries but also the need for a much more positive commitment to building up core resources by donors to UNDP. The increased support of many donor members of the Development Assistance Committee and programme countries was inspiring. The efforts of UNDP and UNFPA to increase on a continuing basis the efficiency and effectiveness of their operations was notable, and it was hoped that those efforts would be rewarded with renewed support to core contributions.

2. The President congratulated the Administrator-designate of UNDP, Mr. Mark Malloch Brown, on his appointment and looked forward to working with him when he began his term of office on 1 July.

4. He noted that meetings would begin on time and that delegations should limit their statements to the essential points in order to ensure a productive dialogue.

5. The Secretary of the Executive Board elaborated the elements contained in document DP/1999/L.3/Rev.1, which contained the provisional agenda, annotations, list of documents and work plan for the session. She noted that a typographical error was contained in the work plan with reference to the report of the Executive Director of UNFPA which was for 1998, not 1999 as shown. The documents for the session were all issued in the official languages and had been posted in advance copy on the Executive Board Secretariat website as available, most six weeks before the session.

7. Information notes by UNDP on the follow-up to Hurricane Mitch and on Y2K compliance were available to Executive Board members. Financial highlights of UNDP were also available in anticipation of the review of the financial situation at the third regular session 1999.

8. The Secretary noted that the report of the second regular session 1999 (DP/1999/13) was not yet available in languages and therefore it was proposed that its formal adoption be postponed to the third regular session 1999.

9. The Executive Board approved the agenda and work plan for its annual session 1999 (DP/1999/L.3/Rev.1) as orally amended.

10. The Executive Board agreed to the following schedule of future sessions of the Executive Board in 1999 and 2000, subject to the approval of the Committee on Conferences:

11. One delegation, supported by another, raised the issue of the venue of the annual session 2000, stating that the benefits as well as the disadvantages of holding the meeting in Geneva versus New York should be examined. The speaker requested that the topic be addressed at the third regular session 1999. Some other delegations opposed raising the subject again, stating that it had already been discussed in the past. One speaker called for a cost analysis for both options. Others stated that it was a surprise that the issue had been raised at the present session without warning. Differing views were expressed on whether it was easier or more difficult for programme countries to be represented when the session was held in Geneva. The Executive Board took note of the comments made.

12. One delegation requested that the Executive Director report to the Executive Board at its third regular session 1999 on the status of the UNFPA operational reserve.

13. The Executive Board agreed to the subjects to be discussed at the third regular session 1999, as contained in the work plan in the annex to decision 99/14.

14. The Administrator expressed appreciation to his colleagues in the United Nations Development Group (UNDG) and the Executive Board for their support during the six years of his tenure. He stated that he had learned a great deal and appreciated the passion he had witnessed with regard to development cooperation. He would miss the diversity of people and ideas in the Executive Board. He thanked everyone who had helped him to make his contribution as Administrator. He was inspired by the vitality of all those around the world who contributed to the activities of UNDP, including those whom he had met who lived in poverty-stricken conditions. The staff of UNDP were dedicated and selfless and worked in many different circumstances. He expressed his gratitude to the Executive Director of UNFPA as well as to those colleagues who had worked in connection with the Executive Board.

15. The Executive Director of UNFPA stated that it was a sad time for the United Nations to lose such a dedicated leader. He had been an innovator and he had led UNDP at a most difficult time because of the shrinking budget for official development assistance and the questioning of multilateralism. The Administrator had been a strong voice in the call for renewed support to development assistance. His innovations had been bold in making changes in the internal management of UNDP and in initiating more flexible programming arrangements. She noted that the commitment of the Administrator to the multi-year funding framework process had been unwavering and had helped to win the Executive Board support. She recognized Mr. Speth's leadership of the UNDG, his sense of humour and positive nature, and the important work that had been accomplished on operational issues at the country level. She counted on the Administrator to continue to speak on behalf of the need for development resources in his new capacity.

21. The Executive Board adopted the following decision:

99/8. Expression of appreciation to Mr. James Gustave Speth, Administrator of

The Executive Board,

Noting with regret that Mr. James Gustave Speth will depart from his position as Administrator of the United Nations Development Programme, effective 1 July 1999,

  Acknowledging the unrelenting and tireless efforts of Mr. Speth to place the United Nations Development Programme at the centre of the promotion of sustainable human development and the progress made by the Programme in its crucial work on poverty eradication during his time as Administrator,

Also acknowledging the efforts made by Mr. Speth, in support of multilateralism, to place the United Nations Development Programme at the forefront of reform and change in the United Nations system, to provide the organization with the tools to face future challenges and to forge partnerships with the full range of development actors so as to ensure a strengthened, effective and efficient role for the Programme in the operational activities of the United Nations,

1. Expresses its sincere appreciation and gratitude to Mr. James Gustave Speth for his effective management of the United Nations Development Programme from 1993 to 1999;

2. Extends its best wishes to Mr. James Gustave Speth and his family for a long and happy life and for continued success in all his future endeavours.

15 June 1999

22. The Administrator thanked the Executive Board for its comments and for the decision.

II. ANNUAL REPORT OF THE ADMINISTRATOR

23. The Administrator introduced his annual report for 1998 (DP/1999/15), including the report on the reports of the Joint Inspection Unit (DP/1999/15/Add.1) and the statistical annex (DP/1999/15/Add.2). He noted that the annual report was a transition report, designed as a bridge between past practices and the new reporting system to be instituted under the multi-year funding framework (MYFF). The report provided highlights of achievements in the areas of resources, results, partnerships and organizational capacity as well as a look ahead to the challenges of the future. In his statement, the Administrator also took a look back to 1994, when he had first proposed an agenda for change to the Executive Board. In the subsequent years, the Executive Board had given UNDP a clear mandate to eradicate poverty through sustainable human development and to focus its work in four areas.

24. The transformation of UNDP was not yet complete, he noted. A challenge lay ahead in completing the results-oriented reform, ushered in by Executive Board decisions 98/23 and 99/1, enabling UNDP to become a powerful player in development cooperation in the next century. Partnerships must be strengthened, and the resources of UNDP must be commensurate with its responsibilities. It was essential that the funding level reach the $1.1 billion target per year very soon. The Administrator underlined the need for the Executive Board to commit itself to UNDP and work with it in partnership to achieve the transformation. The Administrator stated that the proof of the labours in reforming UNDP would be seen in lives that were transformed, the half of humanity that lived on less than two dollars a day. He would continue to follow the work of UNDP from his new position as Dean of the Yale University School of Forestry and Environmental Sciences. UNDP would be in the capable hands of its new Administrator, Mr. Mark Malloch Brown, and its Associate Administrator, Mr. Zéphirin Diabré. He was sure that the staff of UNDP would continue to serve with dedication and commitment to strengthen UNDP as the premier development organization in the world and that the members of the Executive Board would continue to support UNDP and guide the organization as it completed its transformation.

25. The Associate Administrator gave a presentation on resource and programme trends in UNDP. The information provided covered core and non-core contributions, expenditures on programme activities, trust funds, focus areas, and funding allocation by region, including cost-sharing.

26. The Assistant Administrator and Director of the Bureau for Development Policy introduced the review of the global cooperation framework (DP/1999/CRP.7). The report had been produced in response to Executive Board decision 97/29 and to the comments made at the third regular session 1997. It contained a review of the global programme approved for 1997-2000 with an allocation of $126 million and drew inter alia on the findings of a forward-looking assessment of the Global Cooperation Framework undertaken by a group of independent consultants. Lessons to be applied to the subsequent programme (2001-2004) were included in the review. The contributions of various donors to the activities within the global programme were acknowledged.

27. Speakers thanked the Administrator for his report and congratulated him for his achievements during six years in office. Many noted the substantial reforms that had taken place within UNDP as well as in United Nations development cooperation activities. The Administrator, as head of UNDP and as chair of the United Nations Development Group, had made a great contribution to the reform of United Nations development activities. Several speakers welcomed the appointment of Mr. Malloch Brown, who would take up his duties on 1 July 1999.

28. Most of the delegations taking the floor praised the annual report for its excellent organization and thoroughness and as a progressive step toward the new results-oriented annual report (ROAR), which would be instituted in 2000 in connection with the MYFF. Some delegations encouraged UNDP to avoid listing activities. One delegation suggested that the timing of sessions should be examined in order to ensure adequate time for in-depth discussions on the MYFF and the ROAR.

30. The deep support for UNDP expressed by many programme countries at the funding meeting at the second regular session was highlighted. Several delegations noted that the universal, grant nature of UNDP contributions should not be sacrificed. It was noted that national priorities continued to be the key determinants of UNDP development cooperation.

32. One delegation noted that the lack of reference to the follow-up to Executive Board decision 98/1 on narrowing the focus of UNDP interventions and the guiding principles that were endorsed in that decision. The delegation also cited the need for indicators of progress and sustainability of results. Several speakers emphasized the need for further focus in UNDP programme activities in order to maintain effectiveness and efficiency. The need for UNDP to continue to develop as a learning organization, with a culture of evaluation and lessons learned at all levels, was underlined by many speakers. Impact on individuals at the local level must be demonstrated, some speakers urged.

33. Several delegations highlighted the need for UNDP to publicize its results in order to achieve wider public support. One delegation saw a dual role for UNDP: providing support to programme countries and those with economies in transition to help to strengthen institutions and dialogue with civil society; and secondly, as the pivot for coordination at the country level.

34. While some speakers singled out UNDP activities in governance and human rights as praiseworthy, a few others cautioned that such involvement might, in some cases, impact on the trust the organization enjoyed as a neutral partner. Evaluations on governance activities should be made available to the Board. One delegation stated that the most positive contribution UNDP could make to the promotion and protection of human rights was in poverty eradication. Efforts to respond to specific problems in certain areas of the world were commended. Delegations singled out the usefulness of the Human Development Report and the national human development reports.

35. Several delegations requested a progress report on the subregional resource facilities (SURFs).

36. UNDP work in post-conflict countries was noted, in particular in de-mining activities and the resettlement of refugees and migrants. Some delegations suggested that the large number of countries obtaining funding from target for resource assignment from the core (TRAC) line 1.1.3 should be reviewed, as funding from that source had been intended for countries in special situations. One delegation underlined the key role of UNDP in curative development, a characteristic that distinguished the organization from other partners in reconstruction and rehabilitation efforts in post-conflict countries.

37. One delegation was concerned about the low percentage attributed to gender in development programmes. Another delegation praised UNDP for its work with UNIFEM in raising awareness about violence against women. Another speaker requested information on how UNDP planned to mainstream gender and environment at the country level. One delegation raised a query about the implementation by UNDP of Agenda 21.

38. Many delegations urged UNDP to continue to develop and maintain strategic partnerships. One speaker underlined the growing importance of the role of UNDP in the follow-up to the Second Tokyo International Conference on African Development (TICAD II). Another delegation cited the good relationship between the UNDP Secretariat and the Executive Board. Some speakers underlined the need for enhanced cooperation with the regional commissions and development banks.

39. Several delegations highlighted the essential need for continued cooperation between UNDP and the World Bank, especially in relation to the United Nations Development Assistance Framework (UNDAF) and the Comprehensive Development Framework (CDF). A progress report on UNDP-World Bank relations was requested. Some delegations underlined the need for UNDP to have a firm niche in development activities in order to reduce the risk of being marginalized. One speaker noted that a total harmonization of the UNDAF and CDF should not be sought as the priorities of programme countries for loans and grants might differ.

40. The lack of reference to partnerships with the United Nations Office of Project Services and the Joint United Nations Programme on HIV/AIDS (UNAIDS) was noted.

41. With reference to document DP/1999/15/Add.2, one delegation questioned whether the expenditure on international experts was out of proportion with regard to national execution. It was hoped that the hiring of international experts would be undertaken in a manner that promoted South-South cooperation effectively.

43. The Administrator thanked the Executive Board for the comments made on the occasion of his departure. He welcomed the comments on the annual report and the anticipation of the MYFF and the ROAR in the coming years. In that regard, he confirmed that more information on the sources and use of non-core resources would be included in future reports. He underlined that UNDP would continue to emphasize development efforts in Africa, including through the follow-up to TICAD II and other regional processes. He noted that the Steering Committee for the Special Initiative on Africa had agreed to bring all regional efforts together to ensure complementarity. With regard to TRAC 1.1.3 for allocations to special development situations, he agreed that resources had been allocated too broadly and should in the future be focused on a smaller number of critical interventions. The Administrator expressed his enthusiasm for good governance programmes but cautioned that with the growth over the years, governance could become a catch-all category. He was disappointed in the lack of progress in gender in development and believed that the response could be a lot stronger. He stated that the partnership of UNDP with the World Bank would be strengthened under the new Administrator. In closing, he urged the Executive Board to demonstrate its support for the office of the Administrator in order to create a stronger UNDP.

44. The Assistant Administrator and Director of the Bureau for Planning and Resource Management informed the Executive Board that measures were in place to ensure that the best possible candidates were selected as resident coordinators. The new method included ensuring that the United Nations system had full confidence in the process. A two-day simulation exercise aimed at evaluating core competencies for resident coordinator candidates also contributed to the enhanced selection process. The pool of qualified candidates from within UNDP and from other organizations in the United Nations system for resident coordinator openings in 1999 and 2000 had been built up through three rounds of evaluation exercises. In response to a query raised on experts hired by UNDP, he noted that the use of national expertise had grown considerably in the past 10 years, that assignments were shorter and more targeted and that all project managers were nationally based. In response to another query regarding the possible negative effects of decentralized cost-sharing, the Assistant Administrator stated that UNDP had found the country-level knowledge and context to be essential for the mobilization of non-core resources. He noted that both headquarters and country offices were mobilized for fund-raising for core resources in relation to the MYFF. In that regard, it was important to have a strong partnership between headquarters and country offices in working together to raise funds for UNDP and its programmes. With regard to UNDP-World Bank relations, he drew attention to the informal briefing that would be held during the present session.

45. The Assistant Administrator and Director of the Bureau for Development Policy thanked the Executive Board for its comments on the global programme, which would further enhance the rationale of the global programme and the value added to the regional and country programmes. Consultations with the Board on the next global programme were planned for the coming months in order to be sure that stakeholders views were taken into account. Lessons learned from the study of how other multilateral and bilateral agencies developed their global programmes would be taken into account in the design of the next phase. In response to a query raised, she noted that gender mainstreaming had resulted in the seemingly low percentage of projects devoted to gender in development. Many programmes had multidimensional aspects and it was therefore difficult to capture the real statistics in that area. She noted the multitude of sources of information available to the Board regarding UNDP work in the area of gender, including the electronic newsletter Gender Beat. Progress was also under way in the mainstreaming of environment in UNDP programmes. The Assistant Administrator noted that six SURFS had been set up and were operational, with all the posts filled.

46. The Assistant Administrator and Director of the Regional Bureau for Africa responded to queries raised regarding the Africa region. She noted that the study on poverty and inequality in South Africa could be replicated in other middle-income countries that had the relevant in-country institutions and the political will of the Government. The national long-term perspective studies (NLTPS) were one of the tools used by the Regional Bureau for Africa to encourage long-term management and capacity-building. The lessons learned from the first phase of the NLTPS included: (a) that the long-term vision must be connected with mid-term economic frameworks; and (b) a vacuum existed in terms of national institutions that could provide strategic management. In order to address the second finding, 13 national institutions had been identified for strengthening as nodes on strategic issues. She also drew the attention of the Executive Board to the agreement on basic principles for the Partnership for Capacity Building in Africa (PACT), which had been reached recently between the World Bank, UNDP and the African Development Bank. The PACT was managed by the African Capacity-Building Foundation, based in Zimbabwe.

47. The Executive Board took note of the annual report of the Administrator for 1998 (DP/1999/15), the report on the reports of the Joint Inspection Unit (DP/1999/15/Add.1), the statistical annex (DP/1999/15/Add.2), and the review of the global cooperation framework (DP/1999/CRP.7).

III. UNITED NATIONS REFORM

49. He stated that UNDG was an operational and transparent tool whose workplan was regularly updated. He addressed special thanks to the heads of UNFPA, UNICEF and WFP for their support to him as Chair and for their decisive contributions to the UNDG outputs.

50. The Administrator presented his own vision of the development work of the United Nations in the year 2005 touching on the areas of coordination at the country level, linkage with peace and humanitarian work, funding and programming.

52. Many delegations commented favourably on the quality of the report and commended it for being analytical, concise and informative. One delegation stated that document DP/1999/16, combined with the report of the Administrator to the Economic and Social Council (DP/1999/10), presented at the second regular session 1999, provided the basis for substantive discussions and decision-making during the forthcoming session of the Council. One delegation proposed that the report be brought to the attention of the Security Council.

53. Several delegations reaffirmed the central role of UNDP at both headquarters and country levels in the area of coordination in the development field. Many speakers commended the work done by UNDG in 1998 and encouraged UNDP to continue to support and promote ongoing efforts to build bridges between UNDG and the rest of the United Nations system in the area of operational activities for development. That could be accomplished through the participation of UNDP in UNDG, the Administrative Committee on Coordination (ACC) and its machinery, and by direct support to the United Nations Development Group Office (DGO). A number of delegations recalled that coordination was the prerogative of the Government of the host country and acknowledged that substantial progress had been made by the United Nations in that area.

54. A number of delegations underscored the progress achieved in the resident coordinator selection process and encouraged UNDG to continue its work in that crucial area. One delegation, while expressing satisfaction for the work of UNDP and UNDG, underlined the importance of avoiding additional bureaucracy in the area of coordination. Another delegation underscored the competition that still prevailed among United Nations agencies and programmes and the conflict caused by multiple rules and regulations that placed a heavy burden on national public administrations.

55. One speaker stated that it was too early to appraise the output of the work of the UNDG and that the results of the evaluation requested by the General Assembly in resolution 53/192 would have to be carefully analysed. Another speaker expressed his regrets that a clear reference to the UNDAF guidelines, which had been endorsed by ACC, had not been included in the report. One delegation expressed its concern about the double responsibility of UNDP resident representatives serving as resident coordinators and stated that the matter would have to be closely monitored by the Executive Board. More systematic training of staff was supported.

56. Several delegations shared the vision of the Administrator on the possibilities for the United Nations in the area of development in the year 2005. A number of delegations underlined the fact that the UNDAF process was related exclusively to the work of the United Nations. One delegation underscored that the suggestion of a "EUDAF" was not applicable as there was only one European agency responsible for development cooperation while in the United Nations there were many organizations working in the development field.

57. Another speaker stressed the importance of achieving a clear division of labour among the entities in the United Nations since there still existed some overlap in activities at the country level. Another delegation stated that UNDP could promote the right to development but its mandate did not include enforcing human rights instruments.

58. Several delegations expressed their concern about the continued decline in core resources, a factor that could jeopardize the partnership of the United Nations system with programme countries. A number of delegations stated that the annual pledging conference held in the General Assembly was no longer useful since many major donors were not in a position to pledge at that forum because of the timing of their budget cycles. The annual funding meeting held at the second regular session of the Executive Board was supported by several delegations as being more effective in terms of timing and venue. However, several delegations stated that the Executive Board was not in a position to decide on the future of the pledging conference mechanism, as it was an issue for the Economic and Social Council to consider and make recommendations to the General Assembly. One delegation suggested creating a mechanism of consultation on and monitoring of non-core resources, which now represented some two thirds of total UNDP resources.

59. Several delegations noted with satisfaction the efforts of UNDP and UNDG to cooperate with the World Bank and encouraged continued development of that relationship, in particular with regard to the UNDAF and the Comprehensive Development Framework (CDF). One delegation supported a role for the Executive Board in creating a genuine partnership between UNDP and the World Bank. It was necessary to keep in mind the different mandates and comparative advantages of the organizations while noting the complementary activity and equal status of each partner. For example, UNDP had a comparative advantage in medium and long-term studies and in capacity-building in Africa and should continue with those activities. Speakers also recalled the decisive role of the Government of the host country in choosing among the different tools offered through development cooperation. Several delegations underlined that there was no competition per se between the CDF and UNDAF. A flexible approach had to be followed, based on the specific circumstances prevailing in each host country. Several delegations underscored the need to avoid conditionality in the CDF and UNDAF processes. Some speakers stated that it was too early to appraise those instruments. One delegation stressed the importance for UNDP to include activities in the private sector in development in its relationship with the World Bank.

60. Several delegations expressed their support for achievements in the area of disaster mitigation and encouraged further links between those activities and the mainstream capacity-building activities of UNDP. One delegation offered to assist countries with repetitive and frequent natural disasters with its own national expertise. Another delegation stated that it was important for the United Nations to continue to improve its response in the interim phase between emergencies and sustainable development. Another delegation suggested that core resources should be allocated to long-term recovery actions long after the occurrence of a natural disaster.

61. The Administrator thanked the delegations for their frank, substantive and constructive comments and questions. He requested DGO to provide the UNDG acting chair with a comprehensive written note addressing the main questions raised which could then be shared with the Executive Board. The Administrator stated that CDF and UNDAF were in the process of being implemented in selected countries as decided by their Governments. Those experiences would be closely monitored with a view to drawing lessons for the future.

62. The Administrator shared his concerns regarding the growth of World Bank trust funds in areas of grant technical cooperation. The Executive Board would need to monitor that issue and to support UNDP by ensuring internal coherence within their respective governments, notably between the Ministries of Finance and Foreign Affairs. In response to a query raised, the Administrator stated that the UNDAF would bring new impetus to the Tokyo International Conference on Africa (TICAD II) and the United Nations Special Initiative for Africa. The Administrator noted with satisfaction that in 2002, more than 90 per cent of core resources of UNDP would be allocated to countries with harmonized programming cycles. The Administrator stated that it was important to maintain a healthy diversity among the international actors of development.

63. The Associate Administrator stressed the fact that the contribution of UNDP to United Nations reform was an ongoing matter and that there would be plenty of formal and informal occasions to discuss and revisit the matter. UNDG was working in a very transparent manner and UNDP looked forward to the progressive participation of the entire United Nations system in the UNDAF. The comments of the delegations related to the pledging conference would be brought to the attention of the Economic and Social Council through the record of the current meeting. He underscored the fact that the relationship between the World Bank and UNDP were long-standing and that cooperation and dialogue between those two institutions had always taken place. UNDP would monitor closely the development of both the UNDAF and the CDF as well as the question of the grant trust funds of the World Bank. He added that UNDP based its work on national ownership of its programmes, not on conditionality.

64. The Executive Board took note of the report on follow-up to United Nations reform (DP/1999/16).

IV. EVALUATION

65. The Director of the Evaluation Office introduced the report of the Administrator on evaluation (DP/1999/17). He noted that during the past year, the concerns of monitoring and evaluation had been brought to the forefront of the UNDP processes of change and learning. By setting goals and establishing benchmarks and indicators to measure progress, the multi-year funding framework and strategic results framework exercise had integrated information with management and accountability in UNDP. In his introduction, the Director gave an overview of the work of the Office in results-based management, learning and knowledge dissemination, and substantive accountability. Three major evaluations had been completed in 1998: on the programme approach; and on assessments of governance projects in the regions of Latin America and the Caribbean and Arab States, respectively. Two strategic evaluations were currently under way: the role of UNDP in post-conflict situations and the relationship between UNDP and the United Nations Office for Project Services (UNOPS).

66. Many delegations welcomed the introduction by the Director and cited the excellent quality and informative nature of document DP/1999/17, noting the positive evolution of the annual report on evaluation. One speaker stated that the report was the most important document that the Executive Board was discussing during the week as it allowed for lessons learned to be incorporated into the work of UNDP.

67. The importance of evaluation in strengthening the ability of UNDP to demonstrate its achievements was underlined by several delegations. Evaluation served as an important link in the overall cycle of programme management and should be properly considered at the formulation stage.

68. Overall, speakers confirmed the three strategic directions of the Evaluation Office: supporting UNDP in becoming a results-oriented organization; strengthening substantive accountability; and promoting organizational learning. Some delegations suggested that the Evaluation Office could also contribute to promoting transparency and that the organization could be more forthcoming with its planned evaluations as well as with the results of those evaluations. In that context, the stated intention of the Director to circulate evaluation plans was noted positively.

69. Many delegations commended the Evaluation Office for its technical leadership and substantive role in the development of the strategic results frameworks for UNDP and for providing support to the regional bureaux and country offices in the process. One delegation, in particular, recommended that the Office serve as the centre of excellence in UNDP on the results-based management approach and share its experience and lessons learned with bilateral and multilateral donor institutions and programme countries. The specific work on methodologies relating to outcomes and indicators was welcomed by some delegations, with the suggestion that links be made the work of the Development Assistance Committee of the Organization for Economic Cooperation and Development (OECD/DAC) in that area. The definition and application of indicators in the field of governance was welcomed by several delegations. However, one speaker cautioned that individual efforts by organizations in that regard caused confusion and thus, governance indicators should be linked to national initiatives and in response to national requests.

70. Many delegations showed special interest in the Evaluation Office portfolio, citing that strategic and thematic evaluations were essential to results-based management. Support was expressed for the evaluations under way to assess UNDP interventions in post-conflict countries and on the relationship between UNDP and UNOPS. One delegation, on behalf of the Nordic countries, requested a briefing on the evaluation of the round-table and Consultative Group processes. Another delegation offered to share its experience of the country in relation to the evaluation of post-conflict situations. Some delegations called for reinforced emphasis on joint evaluations. The planned country impact assessments were welcomed as steps to strengthen the evaluation portfolio, and already, some delegations were keen to know which countries would be selected for those exercises.

71. Learning from evaluations and making maximum use of lessons learned was one of the paramount concerns articulated by most of the delegations. More attention should be given to analytical presentations of evaluation findings and to the synthesis of lessons learned (including good and bad experiences) that would feed into programmes and decision-making. Access to evaluation-based knowledge needed to be ensured.

72. Further improvements in compliance, despite those already noted, were requested by several delegations. A query was raised as to how managerial accountability was enforced, in particular through compacts signed by UNDP managers, with respect to compliance with mandatory evaluation policies. The preparation of country-level evaluation plans was considered as a useful tool for sharpening the management function.

73. Several delegations concurred that future reports should include plans for the completion of mid-term country programme reviews (now called country reviews) and a record of institutional compliance for the reviews. Inclusion of the global programme in the yearly report on evaluation was also requested.

74. The contribution of the Evaluation Office to the revision of monitoring and evaluation guidelines for the United Nations Development Assistance Framework (UNDAF) was noted.

75. The Director of the Evaluation Office responded to the comments and queries raised during the discussion. He noted that the updating of the guidelines for the UNDAF had been recommended by the UNDAF assessment team he had led in 1998. The revised guidelines were the product of close consultations with members of the United Nations Inter-Agency Working Group on Evaluation chaired by UNDP. Acknowledging the concern of some delegations regarding indicators, the Director stressed that indicators did not explain results but rather were helpful in understanding issues better and in sharpening statements of planned results based on close consultations with the programme countries. He explained that a methodology for the country impact assessments would be developed in 1999. Based on that methodology, a short list of countries would be discussed with the regional bureaux and the final selection made.

76. The Director noted that independence of the evaluation function within UNDP was addressed at two levels. First, on the specific question concerning the institutional positioning of the Evaluation Office, the Director acknowledged the enormous support of the Executive Board and the Administrator in maintaining the independence of the Office. That status had enabled the Evaluation Office to scan the horizon with a more considered view and to select even the most sensitive issues for its evaluations. Second, on the way evaluations were conducted, the primary objective was to ensure that full value was given to issues. Evaluation teams, headed by individuals prominent in their fields, included consultants from the North and South who were thoroughly familiar with the development issues to be examined and knowledgeable in evaluation techniques. The Office did not impose its views on the evaluation teams but rather helped to clarify issues and validate facts.

77. The Director stated that all evaluation reports were now being posted on the Evaluation Office website. He agreed that there was a need to have a more focused look on lessons learned and that new knowledge products based on evaluations would be developed as an integral part of the overall learning process in the organization.

78. In response to the observation noted by one delegation that the number of evaluations conducted had decreased during the last few years, the Deputy Director of the Evaluation Office explained that the average size of UNDP-supported projects had increased from a budget of $1 million to $4 million. With no corresponding increase in the core resources of UNDP, the actual number of UNDP projects had then decreased, and consequently, the number of projects to be evaluated had also decreased. As to the decrease in the number of evaluation reports processed for the central evaluation database, he informed the Executive Board that the extraction of information from evaluation reports was the responsibility of the evaluation team. When that was not done, country offices responsible for the evaluation needed to hire someone to do it with the cost charged against their own budgets.

79. The Associate Administrator emphasized that evaluation was a principal tool for learning, and he expressed the view, as had most delegations, that lessons from experience - both good and bad - should be shared. He highlighted the need for a comprehensive knowledge management system in UNDP that would allow all units in the organization to be involved, connected and committed to learning from each other as a way of ensuring progress. The Associate Administrator underlined the commitment of UNDP to ensuring substantive accountability. The multi-year funding framework and the strategic results frameworks provided the opportunity to develop a results-driven accountability framework for all UNDP operations, including the global programme. Compliance reporting would also include reporting on the mid-term reviews (country reviews) of the country cooperation frameworks, 11 of which had already begun. Follow-up on evaluation recommendations would be given emphasis to ensure that appropriate actions were taken by management.

80. The Executive Board took note of the report on evaluation (DP/1999/17).

V. COUNTRY COOPERATION FRAMEWORKS AND RELATED MATTERS

81. The Assistant Administrator and Regional Director for Asia and the Pacific introduced the note by the Administrator on Assistance to Myanmar (DP/1999/18). The purpose of the note was to report to the Executive Board on the progress and challenges in the implementation of project activities of the Human Development Initiative (HDI) for Myanmar as called for in Board decision 98/14. In compliance with that decision, a three-member international mission carried out an independent review of the HDI in early 1999. The Assistant Administrator updated the Board on the status of HDI activities since June 1998. He noted that the 10 current projects of HDI (approved by the Board in decision 96/1) would be concluded in mid-1999. The 11 projects comprising HDI Phase III (mid-1999 to end 2001) had been approved by the Administrator in accordance with the guidelines provided in Board decisions 93/21 and 98/14.

82. The Assistant Administrator drew the attention of the Executive Board to the key findings and conclusions of strategic HDI issues reported by the 1999 HDI review mission as contained in chapter IV of document DP/1999/18. It was noted that HDI projects continued to be implemented in conformity with the relevant Governing Council and Board decisions. All 10 ongoing projects were performing satisfactorily with varying degrees of success and impacts of project activities now highly visible. In terms of the challenges faced by HDI, attention was drawn to the short time frame of two and a half years for HDI projects, coupled with the frequency of assessments and reviews. In addition, the unsustainability of HDI activities from an institutional sense, given their implementation modality at the grass-roots level, was noted, as was the significant contribution of HDI to human development. The limited resources for HDI were noted as inadequate to address the magnitude of humanitarian issues, particularly that of HIV/AIDS. Lack of access to villages could make a difference in the sustainability of HDI activities.

83. The Resident Representative in Myanmar gave his assessment of the human development challenges since taking up his duties in February 1999. He reiterated the significant progress of the HDI projects in addressing some of the basic humanitarian needs, promoting participatory processes and building local capacities. The Resident Representative reaffirmed the ongoing challenges faced by HDI projects at the operational level. He noted that UNDP, along with other United Nations organizations working in Myanmar, had taken some noteworthy initiatives, such as the preparation of a Social and Human Development Report for Myanmar in 1998, in an effort to address the paucity of development-related information. Other outputs included a detailed work plan in preparation for a common country assessment (CCA) and an integrated development programme for the Northern Rakhine State, which would build on, and phase into, the current exercise led by the United Nations High Commissioner for Refugees for the returnees to that area. He highlighted the continued collaboration of UNDP with civil society organizations and the diplomatic missions in Myanmar. He concluded by requesting that the Executive Board consider the need for urgent co-financing of HDI activities to address the critical humanitarian needs in Myanmar.

84. Delegations praised the work of UNDP and expressed appreciation for the results achieved to date for sustainable human development. Delegations noted the constraints inherent in the mandate given to UNDP for grass-roots activities and the difficulties faced in project implementation. Several delegations mentioned that they had received reports from their embassies in Yangon that were complimentary of the work of UNDP. A number of delegations expressed concern for the increasing HIV/AIDS problem, the lack of village access linked to HDI activities, and the time-frame for HDI projects. One delegation recommended that the United Nations Capital Development Fund could be involved in increasing village access and expressed its willingness to provide support. Delegations urged continued collaboration with United Nations organizations and welcomed the preparation of a CCA. On the whole, delegations were most appreciative of UNDP efforts to maintain both formal and informal consultations on its activities in Myanmar. One delegation, speaking on behalf of the Nordic countries, mentioned that at a recent meeting of a Nordic delegation with Daw Aung Suu Kyi, the General-Secretary of the National League for Democracy, she expressed her support for UNDP activities and its community-based approach.

85. Several delegations cited the proposed programme of development assistance for the Northern Rakhine State and supported mobilization of non-core resources for the new initiative for an integrated area-development programme. One delegation welcomed the implementation of micro-credit and income-generation activities by non-governmental organizations as an attempt by UNDP to alleviate poverty and, among other things, to mainstream gender issues.

86. All speakers expressed their full support for continued assistance by UNDP to Myanmar within the framework of the Human Development Initiative-Extension and to support a programme of development assistance in the Northern Rakhine State.

87. The Assistant Administrator stated that UNDP had taken note of the comments made. He thanked Executive Board members for their continued guidance and support of UNDP activities in Myanmar.

88. The Executive Board took note of the note of the Administrator on Assistance to Myanmar (DP/1999/18).

VI. INFORMATION AND COMMUNICATION STRATEGY

89. The Associate Administrator introduced the report on the UNDP corporate communications and advocacy strategy (DP/1999/19). He noted that the strategy was still a work in progress. The report provided information on achievements in communications and advocacy since the introduction of the 1995 strategy, as well as lessons learned and challenges and actions to be taken in the 10 priority areas identified by the Executive Board at its annual session 1998. He noted that UNDP was examining intensively how best to consolidate and build on the results of the 1995 strategy and also in the follow-up to decisions 95/23 and 99/1, which underscored the vital role of information and communication in relation to resource mobilization.

91. The Director of the Division of Public Affairs gave a presentation with elaboration of the results achieved, lessons learned and specific actions to be taken with regard to the 10 action priority points. He noted in particular the progress achieved since 1995 in the interaction of senior UNDP officials with the media in both donor and programme countries. To facilitate interaction between UNDP staff and the media, a few key corporate messages would be developed so that the organization would be promoted more effectively. Results-based information would be obtained in order to strengthen the linkage with resource mobilization. Training and workshops were planned to enhance the skills of senior managers as better spokespersons. Plans were also under way to intensify efforts to promote the work of the organization within the United Nations system.

92. Delegations welcomed the progress in developing a UNDP communication and advocacy strategy for UNDP. The report represented a further step in development of the strategy that would be further elaborated at the first regular session 2000 and the annual session 2000. Several speakers praised the work of the UNDP Division of Public Affairs for its part in developing the strategy. The questions referred to in the presentation were very pertinent to the needs of UNDP. One delegation indicated its willingness to commit financial support to the implementation of the strategy once it was approved by the Executive Board.

93. Several speakers underlined the critical importance of communications and advocacy in relation to resource mobilization. For that reason, it was essential for UNDP to communicate its success stories and achievements. There was a clear linkage between the results-based approach of MYFF and the communications and advocacy strategy, elements that had to be integrated at all levels of the organization. A sharper profile of UNDP had also to be elaborated in order to send clear messages about the organization.

94. Many delegations underlined the need for resident representatives to have excellent communication skills and to receive training. One delegation suggested that a system-wide communication strategy could be useful given the many responsibilities of resident representatives/resident coordinators. Other speakers called for better communication between UNDP headquarters and country offices, and for greater cohesion of messages from headquarters units.

95. Targeting of messages and communication strategies was seen as very important. In that regard, the communication and advocacy strategy must be adapted to individual situations, countries and populations, including through close consultation with host countries. One delegation suggested that UNDP should have an individual strategy for each donor country in addition to a broad communications and advocacy strategy. Another delegation supported the targeting of messages about UNDP with a view to later enlarging the strategy to include development activities in the United Nations system. The same delegation underlined the need for the strategy to go beyond resource mobilization to promote sustainable human development and to provide analysis and information about activities in the development field.

96. Several speakers underlined the need for complete information on the budgetary implications of the strategy, as requested in Executive Board decision 98/15 and looked forward to discussion on that aspect at the third regular session 1999.

97. Comments on individual UNDP publications included appreciation for the Human Development Report, national human development reports, Overcoming Human Poverty and for Global Public Goods: International Cooperation in the 21^st Century. Two delegations stated that the contents of the publication associated with the International Day for Poverty Eradication on celebrities was not appropriate for audiences in their countries. Overall streamlining of publications was strongly supported, as was the increasing use of the Internet. The Publications Committee was seen as a positive mechanism that would lead to overall improvements in UNDP publications. One delegation underlined the need for the results-oriented annual report (ROAR) to incorporate information on use of resources, including non-core resources. The speaker expressed gratitude to UNDP for its appointment of a Goodwill Ambassador from his country.

99. One delegation expressed concern about the late issuance of Executive Board documentation in languages other than English.

100. The Associate Administrator assured the Executive Board that UNDP was committed to pluralism in its documentation. He thanked the Board for its comments that would aid UNDP in the further development of its communications and advocacy strategy and in particular, the delegation of Canada for its offer of financial support. The spirit of partnership exemplified at the present meeting was welcomed and he looked forward to the continued discussions on the topic at the first regular session 2000.

101. The Director of the Division of Public Affairs noted the steps taken by UNDP to target its messages to specific audiences, both in donor and programme countries. He agreed that complex concepts needed to be translated into simple messages to reach a wider audience. The Publications Committee had a very positive role in determining the cost-effective and meaningful use of publications. He noted that UNDP was using the Internet with increased frequency in order to relay messages quickly and efficiently.

102. The Executive Board adopted the following decision:

99/10. UNDP corporate communication and advocacy strategy

The Executive Board

1. Takes note of document DP/1999/19 submitted in response to decision 98/15 and also notes that elaboration of the UNDP corporate communication and advocacy strategy continues as work in progress;

2. Welcomes the efforts to date to enhance the visibility of UNDP and the results achieved to date in the promotion of a culture of communication and advocacy in UNDP;

3. Also welcomes the emphasis in the UNDP corporate communication and advocacy strategy on results and progress towards a clearer demonstration of the development achievements of UNDP;

4. Requests further elaboration of the results-based UNDP corporate communication and advocacy strategy to strengthen the linkage with the multi-year funding framework and to report on budgetary and staffing implications;

5. Invites the Administrator to report further in this regard, taking into account the results of the discussion on the multi-year funding framework, initially with an oral report at the first regular session 2000, to be followed by a substantive report and discussion at the annual session 2000.

22 June 1999

VII. RESOURCE MOBILIZATION

103. The Assistant Administrator and Director of the Bureau for Planning and Resource Management introduced the interim report on the implications of the funding strategy for UNDP-associated funds and programmes (DP/1999/20). He noted that the United Nations Development Fund for Women (UNIFEM), the United Nations Capital Development Fund (UNCDF) and the United Nations Volunteers programme (UNV) had progressed in ensuring that their future programme and budget processes were in line with the new funding strategy.

104. He also gave a progress report on the development of the multi-year funding framework (MYFF). Since the second regular session 1999, there had been significant advancement in defining the strategic results frameworks (SRFs), with total compliance achieved for country offices and for the regional and global programmes. That reflected a good understanding of results-based management in UNDP and demonstrated a shift from input management. A core group was currently working on data analysis and the aggregation of preliminary results. The Administrator-designate had expressed his strong support for the exercise. Continued close consultation with the Executive Board was anticipated during the months ahead.

107. One delegation requested that UNDP provide further information prior to the third regular session 1999 on the methodology of classifying activities by theme.

108. It was noted that the funding meeting at the second regular session 2000 would include pledges to the associated funds and programmes. However, one delegation pointed out that a decision on the future of the General Assembly pledging conference belonged to other competent forums.

109. The Assistant Administrator noted that the process of consultations would be intensified on both the MYFF for the third regular session 1999 and then the ROAR and the funding meeting for the second regular session 2000. In response to the query raised, he informed the Executive Board that UNDP had developed a set of definitions and classifications, including goals and sub-goals in connection with the instituting of results-based management. That information would be shared with the Board. Reporting on both results and resources used in thematic areas would take place in the context of the ROAR. It would also be possible to report results and resources spent within certain classifications, such as net contributor countries.

110. The Executive Board took note of the interim report on the funding strategy for UNDP-associated funds and programmes (DP/1999/20).

VIII. TECHNICAL COOPERATION AMONG DEVELOPING COUNTRIES

113. Many delegations who took the floor recognized the unique, effective role played by the Special Unit in promoting and implementing TCDC and stressed the need to maintain its separate identity and to strengthen its financial and human capacities in order to enable it to carry out its General Assembly mandate effectively.

114. There was a wide recognition that while developing countries should shoulder the main responsibility for managing and financing TCDC, increased donor support remained essential for the furtherance of TCDC. In this connection, many delegations expressed appreciation for the additional financial contributions to TCDC by a number of donor countries, through either the South-South Trust Fund or triangular arrangements, and called for intensified efforts by the international community in that regard. Many delegations also stressed the need to increase resource allocation for TCDC in the next programming period. It was suggested that special attention be given to diversifying the TCDC funding base within the multi-year funding framework and the United Nations Development Assistance Framework.

115. A number of delegations asked about the role of the Special Unit in the initiative to prevent maternal mortality, the Micro-financing Africa (MicroFin Africa) project, the West African Rice Development Association (WARDA) programme, and in support to Small Island Developing Countries (SIDS). One delegation requested further information about the publication budget of the Unit. Several others proposed more incorporation of lessons learned and the views of donors on TCDC in future reports. Another delegation raised the issue of technical cooperation among transitional countries.

118. The Associate Administrator expressed his appreciation for the overwhelming support for TCDC and the Special Unit. He assured the Executive Board that top management did not interpret mainstreaming TCDC as the disappearance of the Special Unit. On the contrary, UNDP would do whatever necessary to strengthen further the leadership role in TCDC and the Special Unit within available resources.

119. The Executive Board adopted the following decision:

99/11. Technical cooperation among developing countries

The Executive Board

1. Takes note of the report of the Administrator on technical cooperation among developing countries (DP/1999/21);

2. Requests the Administrator to prepare a report to enable the Executive Board to respond, in an appropriate manner and in the context of the multi-year funding framework and the United Nations Development Assistance Framework processes when the budget is being discussed in 2000, to the General Assembly request set out in paragraph 43 of its resolution 53/192 of 15 December 1998, taking into account the mandate of the Special Unit for Technical Cooperation Among Developing Countries.

22 June 1999

IX. UNITED NATIONS OFFICE FOR PROJECT SERVICES

120. The Executive Director introduced his annual report on the activities of the United Nations Office for Project Services (UNOPS) in 1998 (DP/1999/22) and the statistical annex (DP/1999/22/Add.1). He noted that the report was based on the 1998 UNOPS business plan, a copy of which had been provided to the Executive Board at its third regular session 1998. In that regard, he reported on the increased financial performance in 1998 relative to the targets set in the business plan, further noting continued strong demand for services in the first six months of 1999. The Executive Director noted a decline in new projects funded by UNDP core resources and reported further progress on client diversification. He also gave four examples of new product offerings that were developed in 1998.

121. The Executive Director drew the attention of the Executive Board to the issue of delegation of authority on personnel matters, noting that the delegation, pending since the adoption of Executive Board decisions 94/12 and 94/32 that had established UNOPS, was a vital element in completing the procurement regime of UNOPS. Stating that the delegation of authority was of particular importance to further diversification in the provision of those services, he presented an overview of the impact and implications for UNDP and UNOPS of the delegation. He also reported that the United Nations Office of Legal Affairs had expressed an opinion supportive of the delegation.

123. The Associate Administrator, UNDP, urged that the issue of the delegation of personnel authority should not overshadow the considerable contributions that UNOPS has made. He stated that UNDP was generally satisfied with its collaboration with UNOPS and, more importantly, the countries using UNOPS services were happy. While observing that UNDP would have preferred to have been more closely involved in the discussion of the delegation of personnel authority prior to the Executive Board meeting, he indicated that UNDP recognized that the UNDP-UNOPS relationship would evolve and that UNDP did not oppose a decision being taken.

124. Stating that his office had not had time to study adequately the UNOPS proposals for the delegation of personnel authority, the Assistant Administrator for the Bureau for Planning and Resources Management, UNDP, indicated that UNDP supported such delegation in principle. He offered to engage with UNOPS in clarifying the modalities of the delegation and further offered assistance in resolving some pending issues relating to personnel contracts.

125. The Executive Director expressed his appreciation to the delegations and UNDP for their encouraging words. He strongly emphasized that the framework of the 1994 relationship between UNDP and UNOPS still stood, and that within this, UNOPS needed the delegation of personnel authority to be able to service new non-UNDP clients. The Executive Director responded to specific questions raised by delegations.

126. The Executive Board adopted the following decision:

99/12. UNOPS: Annual report of the Executive Director

The Executive Board

1. Takes note of the report of the Executive Director of the United Nations Office for Project Services (DP/1999/22 and Add.1), further noting that the Office continues to operate in accordance with the self-financing principle;

2. Welcomes the continued progress of the United Nations Office for Project Services in diversifying its client base and in increasing its level of services to United Nations agencies;

3. Takes note of the ongoing evaluation by the United Nations Development Programme of the relationship between the United Nations Office for Project Services and the United Nations Development Programme for presentation at the first regular session 2000 and requests the Administrator to ensure that the Office is fully consulted in this process in order to increase coordination and cooperation between the United Nations Office for Project Services and the United Nations Development Programme and invites the Executive Director and the Administrator to comment on the outcome;

4. Recognizes that changes in the current personnel regime for the United Nations Office for Project Services are necessary;

5. Requests the Executive Director of the United Nations Office for Project Services, in collaboration with the Administrator and in consultation with all interested parties on all relevant legal, budgetary, staff and policy implications, to present at the third regular session 1999 a detailed proposal on the responsibility of the Office in personnel matters, as envisioned in decisions 94/12 of 9 June 1994 and 94/32 of 10 October 1994 on the delegation of authority in the areas of personnel, with a view to taking a decision at that session.

22 June 1999

128. The Executive Director, noting that it was unusual for the JIU to issue a report on a single organization, expressed his gratitude to the JIU inspectors for their report. He reiterated that UNOPS, as stated in his report (DP/1999/25), was in agreement with the recommendations pertaining to UNOPS and reported that UNOPS was currently following up on six of them.

129. The Secretary, ACC, presented the note by the Secretary-General (A/53/788/Add.1) containing his remarks and those of ACC members on the JIU report. He highlighted the view expressed in the note that the Management Coordinating Committee (MCC) had been a flexible tool for management and continued to add value without increasing bureaucracy. He expressed his appreciation to the JIU for its contributions to the ongoing reform processes in the United Nations system.

130. The Associate Administrator, UNDP, observed that UNDP agreed with the conclusions put forward in document A/53/788/Add.1.

132. In his response, the JIU inspector emphasized that the main objective of the JIU report had been to broaden and increase the effectiveness of the partnership between UNOPS and other specialized agencies, for the benefit of programme countries. Distinguishing between the conclusions of the JIU and the ACABQ observations that were quoted in the report, he expressed the opinion of the JIU that the MCC had performed its initial function and that the time had come for UNOPS to be managerially self-sufficient. He noted that the UAG had only met once in five years, and that the JIU considered that the ACC machinery would better serve the purposes for which the UAG had originally been conceived.

134. The Executive Board took note of the report of the Executive Director on the report of the Joint Inspection Unit (DP/1999/25).

135. Introducing the report on the follow-up to recommendations of the report of the Board of Auditors (DP/1999/24), the Executive Director stated that the implementation of the recommendations contained in the report of the Board of Auditors was ongoing. He noted that UNOPS had responded by, inter alia, improving its procurement procedures and drawing up guidelines for new types of contracts such as special service agreements. He stated that the UNOPS annual report provided an update on the implementation of the Integrated Management Information System (IMIS) and Y2K compliance.

136. Two delegations took the floor to comment on the report, with one delegation expressing satisfaction with the work UNOPS had undertaken in its country, and emphasizing that it was prepared to give UNOPS the authority it might need, as outlined in the reports of UNOPS, JIU and the Board of Auditors. A second delegation posed four specific questions on the report of the Board of Auditors concerning SSA contracts, IMIS and the status of UNOPS financial activities in 1999, Y2K compliance, and its procedures in possible fraud situations.

137. The Executive Director responded to the specific questions raised on SSA contracts and the issue of fraud. He noted that the role of UNOPS in fraud examination was limited to preliminary investigations into fraud allegations and that the final decision as to the outcome and follow-up action was made under the purview of a specific machinery set up for this purpose within UNDP.

138. The Chief Information Officer, UNOPS, stated that IMIS release 3 was in full production and that implementation should be completed by the end of the second quarter of 1999. Noting that the UNOPS implementation of IMIS still depended on expenditure data gathered from UNDP country offices, he expressed concern about still unresolved problems in obtaining that data. He provided a brief overview of Y2K activities in UNOPS, explaining that a joint UNOPS-UNDP Y2K team has been set up to work on areas of common concern.

139. The Executive Board took note of the report of the Executive Director on follow-up to recommendations of the report of the Board of Auditors (DP/1999/24); and requested the Executive Director to provide the Executive Board at its annual session 2000 with an updated overview of the implementations of the recommendations of the Board of Auditors.

XIV. FINANCIAL, BUDGETARY AND ADMINISTRATIVE MATTERS

141. Two delegations expressed their support for the recommendations as revised. One delegation noted that financial risk could be reduced by early payment of pledged contributions, as well as through tighter controls on expenditure and training of local staff, also noting that the effects of the multi-year funding framework (MYFF) should be reviewed in due course.

142. The Assistant Administrator confirmed that the operational reserve for regular resources would indeed be reviewed based on the experience of the MYFF.

143. The Executive Board adopted the following decision:

99/9. UNDP financial risk management; review of operational reserve

The Executive Board

1. Takes note of the report of the Administrator (DP/1999/5/Rev.1) and of the further clarifications contained in document DP/1999/CRP.9/Rev.1;

2. Notes the approach recommended by the Administrator to determine United Nations Development Programme liquidity;

3. Supports the recommendation of the Administrator for the establishment of a reserve for other resources activities and the mechanism for its funding;

4. Approves the recommended formula for the calculation of the level of the operational reserve for regular resources (see annex); and decides to reduce the factor used to calculate the liability and structural risk component of the reserve from 25 per cent to 10 per cent.

16 June 1999

FORMULA FOR THE OPERATIONAL RESERVE FOR REGULAR RESOURCES

The sum of the following components:

X. INTERNAL AUDIT AND OVERSIGHT

144. The Associate Administrator introduced the report on UNDP internal audit and oversight activities (DP/1999/23). The report provided details on the internal audit and oversight services of the UNDP Office of Audit and Performance Review (OAPR) for the year ended 31 December 1998. He noted the progress in implementing the accountability framework, including through the control self-assessment exercise, and informed the Executive Board that staff had been identified to fill 12 of the 13 vacant posts in OAPR. The Associate Administrator also highlighted aspects of recurring issues referred to in the report, including cash management, payment of government local office contributions, programme reporting, procurement of goods and services, and the financial management system. He stated that UNDP would continue to work with the United Nations External Board of Auditors to increase compliance on nationally executed projects. Both the outgoing and incoming Administrators were committed to a culture of accountability in UNDP.

146. The Executive Director of the United Nations Office for Project Services (UNOPS) introduced the report on internal oversight of UNOPS (DP/1999/22/Add.2). The report provided details on internal audit services provided by OAPR on UNOPS operational activities for the year ended 31 December 1998. He noted that the clients of UNOPS were its toughest auditors, as the Office was under their constant scrutiny. He also noted the successful business plan strategies of UNOPS and expressed the view that the Office could make further improvements in staff training and information technology.

147. Several delegations took the floor to thank the three organizations for their reports and for the commitment to implementation of the recommendations of internal and external audit and oversight bodies. One delegation underlined the need for further inter-agency coordination in audit and oversight, and requested that UNDP, UNFPA and UNOPS coordinate their reports in the future, so that the reports had a similar format, or possibly consider producing a combined report.

148. Speakers expressed support for the clear role and structure of OAPR, with its responsibility for the accountability framework, control self assessment exercise, and review and oversight functions. Concern was raised about the vacant posts in OAPR as described in the document. However, the progress announced in the opening remarks was noted.

149. Some speakers requested more information on compliance, including data on the implementation of audit recommendations for previous years as well as the current review year. One delegation requested that UNDP issue the results of the outcomes of new special audits, referred to in paragraph 37 of document DP/1999/23.

150. One delegation, supported by others, raised a query regarding the follow-up to rejected audit recommendations referred to in paragraph 14. The speaker noted that significant risk to the organization could result if recommendations were rejected. He also noted that in his country the head of internal audit was required to provide information on an annual basis on whether control systems were adequate, including with regard to material loss. A similar statement by UNDP in its report would be useful in contributing to the work of the Executive Board in its overall corporate governance.

151. Concern about submission of audit reports for nationally executed projects was raised by several speakers. One delegation, supported by others, requested the setting of annual targets for the provision of audited financial statements for nationally executed projects. Another delegation commended the increase in nationally executed projects and encouraged its further use in order to foster ownership and capacity in programme countries and reduce overhead costs. The speaker, noting the need for evaluation and audit of nationally executed projects, requested UNDP to strengthen the capacity of its country offices in the area of implementation of national execution.

152. The Director of OAPR noted that with regard to nationally executed projects, targets had been set but not met because of late receipt of audit reports, cases where the reports had not been completed, or because some programme countries had not identified suitable auditors. In response to a query raised regarding the progress in the investigation on the Reserve for Field Accommodation, he informed the Executive Board that measures were under way to prosecute those who had engaged in criminal activity. The Director informed the Board that while the control self assessment exercise had been partially designed to address the issue of control breakdowns, there had not yet been an overall global assessment of UNDP and that it would be too early for him to issue the kind of statement on control systems requested during the discussion.

154. One delegation, while welcoming the self-critical nature of the report and the progress made during 1998, expressed concern that it remained unclear whether or not the objectives of the regional programmes had been achieved. The delegation requested further information on the impact of the regional programme and asked what conclusions had been drawn from the recent evaluation of execution modalities. The same delegation stated that the management information systems of UNFPA and UNDP should be compatible. Another delegation suggested that the report should have the format of a progress report so that a year-by-year comparison could be made of progress achieved in implementing audit recommendations. One delegation stated that the value of the internal audit and oversight reports of UNFPA, UNDP and UNOPS would be enhanced if illustrative examples were included and if the three organizations either produced a joint report or else prepared reports with an identical format.

155. The Deputy Executive Director (Policy and Administration) thanked the delegations for their comments and questions and noted that UNFPA execution had declined in 1998, further pointing out that about 50 per cent of the execution concerned procurement. Nevertheless, UNFPA would look into the matter and would continue to emphasize national execution and national capacity building. With regard to the Policies and Procedures Manual he pointed out that all sections of the programme manual had been completed and disseminated and the programme guidelines were also available on the Intranet. The Finance and Personnel manuals were in the process of being finalized. Concerning the closure of projects, he noted that over 1,700 projects had been closed. He added that data on the current status of projects awaiting financial closure would be provided later after verification.

156. The Chief, Office of Oversight and Evaluation, noted that the number of projects to be closed was a moving target since additional projects regularly continue to be completed. However, the Fund now had a system in place to identify dormant projects. She welcomed the suggestions regarding the format of future oversight reports and noted that such guidance was both helpful and appreciated. Regarding the regional programme, she pointed out that country offices had been actively involved in the formulation of the new intercountry programme to be submitted to the Executive Board in January 2000. The new intercountry programme would have explicit linkages between its components and the country programmes. Concerning the interface between UNFPA Integrated Field Office System (UNIFOS) and the Automated Field Office Accounting System (AFOAS), she noted that the introduction of the Integrated Management Information Services (IMIS) would help to alleviate the problem. She noted that UNFPA was addressing the chronic problems mentioned in the report, however, it should be borne in mind that change did not occur overnight: first awareness had to be created and then behaviour could be changed. She added that UNFPA looked forward to receiving the list of specific issues mentioned by one delegation.

157. The Executive Board took note of the reports on internal audit and oversight activities of the United Nations Development Programme, the United Nations Population Fund, and the United Nations Office for Project Services (DP/1999/23, DP/FPA/1999/8, and DP/1999/22/Add.2).

XV. FIELD VISITS

158. The Permanent Representative of Kyrgyzstan to the United Nations introduced the report on the field visit to Brazil (DP/1999/CRP.8). She noted that the mission had been the largest field trip in the history of UNDP, with a delegation comprising 17 people from 16 countries, representing both donor and programme countries. The team had met with representatives of the Government of Brazil, UNDP, UNFPA, other United Nations agencies and international organizations, international financial institutions and the people of Brazil. The delegation had been favourably impressed with the relationships of UNDP and UNFPA with the Government, which were no longer dependent on donor/recipient relationships but genuine and equal partnerships.

159. The Deputy Director of the Office of Population, Bureau for Population, Refugees and Migration, United States Department of State, in introducing the team's comments on the UNFPA programme in Brazil, noted that Brazil had long been a country of contrasts. It had the world's eighth largest economy but ranked only 62nd in terms of its human development index. Some regions were very advanced, while others lacked many basic services, and income distribution was highly skewed between rich and poor. Working women were better educated than working men, but earned only 60 per cent as much. The current Government had expressed a commitment to reduce social inequalities but adverse economic developments such as the devaluation of currency had threatened progress, especially for the poor and women. The decentralization of government to improve accountability and service delivery was well under way in Brazil, a factor that presented special challenges to state and local officials in the poorer regions in the country - challenges that UNFPA and UNDP were addressing in their programmes. Turning specifically to the UNFPA programme, she stated that outside assistance to Brazil in reproductive health was limited to a few bilateral donors and international foundations. She noted, however, that the World Bank and the Inter-American Development Bank (IDB) had provided substantial assistance in the broader health sector and for combating HIV/AIDS. To maximize the effectiveness of its own limited resources, the team encouraged UNFPA to enhance its information-sharing and project collaboration, for example, with the World Bank on HIV/AIDS, and with other relevant donors in Brazil. The team believed that geographic concentration of programme resources was an effective strategy.

161. The Permanent Representative of Brazil was pleased to note that the report had presented a positive assessment of UNDP and UNFPA activities in Brazil. UNDP would continue to be an important development partner of both public and private sector development and civil society in Brazil, with the common objective of achieving SHD. The programme had evolved over the years to reflect the changes in the state of development of Brazilian society and the decentralization of the Brazilian State. Brazil was a country of continental dimensions, whose economy was among the 10 largest urban industrial economies in the world. While the country was rich in human and natural resources, it still had a long way to go in the fight against social exclusion and the eradication of poverty. UNDP was an important ally in this endeavour. Continued and priority attention must be given to sustainability, capacity-building and the implementation of exit strategies. The Government and UNDP were fully committed to facing these challenges. The Government also attached great importance to technical cooperation among developing countries. The Brazilian Cooperation Agency developed TCDC programmes with South American, Central American and the Caribbean countries, as well as with African countries, particularly with those with a Portuguese-speaking population, and with countries in Asia and Eastern Europe. The members of the Board had visited some of the most important UNFPA projects developed in the poorest areas of Brazil. As suggested in the report, however, the Government believed that a greater degree of operational flexibility could, in the end, make UNFPA activities in Brazil even more efficient. The speaker then expressed the gratitude of his Government to the Executive Director of UNFPA and reaffirmed Brazil's commitment to the Cairo Programme of Action as well as to the success of the ICPD+5.

162. The Executive Secretary, International Cooperation, Office of the Prime Minister for Peru, noted that in her country, as in Brazil, fund-raising, the management of non-core funds and national execution were very important. Peru had reinforced "partnership for development", a concept that, as in Brazil, had made a positive influence on the Government.

163. Delegations that had taken part in the mission commented on the report and its findings. Many underlined the major contribution of UNDP to sustainable human development programmes in Brazil and the high impact of its cooperation with the Government. Most emphasized the major contribution of UNDP to a country that continued to have social and regional disparities and a need for targeted poverty eradication efforts. One speaker emphasized the strong regional programme in Latin America and the Caribbean, with important interregional initiatives. Concern was expressed about the effects of the Brazilian financial crisis and the possible related setbacks in environmental and social progress. One delegation called for the role of UNDP in advocacy to focus more on the need for long-term economic reform.

164. Several delegations stated that the Brazil programme was a very sophisticated one and the role that UNDP played in Brazil was catalytic, involving partnerships not only with the Government and the regional groupings, but also with the World Bank, IDB and bilateral donors. Some underlined the cooperation as a very good example of how UNDP could work with the World Bank and regional development banks. Other speakers noted that the UNDP programme in Brazil successfully supported many of the same objectives of their bilateral cooperation programmes. Both the Resident Representative in Brazil and the UNFPA country representative were praised by the team members who took the floor.

167. Another delegation raised several issues relating to the legal and accounting issues linked to cost-sharing and the difference of overhead costs charged by the UNDP office in Brazil as compared with that charged by the United Nations Office for Project Services.

168. One speaker emphasized that the multi-year funding framework (MYFF) had been adopted in order to increase core resources not because the Executive Board felt that non-core resources had become disproportionately important. If cost-sharing programme were to spread, then it would seem that the MYFF was being adopted for no reason since