Source: http://www.un.int/usa/06_067.htm http://www.un.int/usa/06_067.htm
Date: April 5, 2006

United States Mission to the United Nations
USUN PRESS RELEASE # 67 (06) 
April 5, 2006

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Testimony of Ambassador Bolton, “Moving Ahead on U.N. Reform,” before the House Appropriations Committee, Subcommittee on Science, State, Justice and Commerce, April 5, 2006
Introduction
Chairman Wolf, Ranking Member Mollohan, and distinguished members of the subcommittee, thank you for the invitation and opportunity to meet with you today.  My colleague, Assistant Secretary Silverberg has just now had the opportunity to discuss the broad landscape of both the challenges and opportunities we face at the United Nations.
In the short time that I have, I would like to focus my remarks on some of the discussions and negotiations related to budgetary issues and management reform we are having in New York.  These conversations in many ways are some of the most important ones taking place in New York, for they have a direct bearing on the ability of the United Nations to fulfill its important mandate.  As we work to expand the UN mission in Sudan to include Darfur, for example, we must ensure that illegitimate management practices or corrupt procurement methods do not hamper the ability of UN forces to complete their critical mission.
Mr. Chairman, one of the key goals of the Bush Administration is for all parties in the U.N. system to take greater responsibility for choices they make, or do not make in some cases.  I emphasize all parties because it must be a concerted effort by all member states of the United Nations, not just the Secretariat and various U.N. agencies.  Ultimately, the Secretariat is responsible to member states so it is time for member states to take responsibility and provide the Secretariat with the leadership and tools to carry out its mandate.  
Changing the Culture at the United Nations
I believe we are beginning to make some progress in recognizing how deep the structural problems run, which is an important first step.  Whether it is Mr. Paul Volcker citing a “culture of inaction” at the U.N., or the Office of Internal Oversight Services (OIOS) citing a “culture of impunity” in how procurement matters are handled at the Department of Peacekeeping Operations (DPKO), the world is increasingly alarmed to the glaring deficiencies within the U.N. system – deficiencies which provide an inviting target for those would abuse the system as we saw in the case of the Oil-for-Food Scandal.  
It is not just outsiders saying this Mr. Chairman.  Many of us were struck by the comments and report issued by Secretary-General Kofi Annan recently.  In his own words he noted, “The earlier reforms addressed the symptoms, more than the causes, of our shortcomings.  It is now time to reach for deeper, more fundamental change.  What is needed, and what we now have a precious opportunity to undertake, is a radical overhaul of the entire Secretariat – its rules, its structure, its systems – to bring it more in line with today’s realities, and enable it to perform the new kinds of operations that Member States now ask and expect of it.”  This was necessary, he continued, because “in many respects our present regulations and rules do not respond to current needs, and indeed they make it very hard for the organization to conduct its work efficiently or effectively.”   We concur fully with the Secretary-General that, Such a radically expanded range of activities calls for a radical overhaul of the United Nations Secretariat — its rules, structure, systems and culture.  And that, Up to now, that has not happened.”  Consequently, our expectations of work from the United Nations has changed dramatically and so, too, should we enable the UN to update its rules and regulations.
We share the view of the Secretary-General and applaud his forthright and blunt acknowledgment of the nature of the problem.  The notion of “radical overhaul” is exactly what we have been stressing.  And it is exactly because we share that assessment, Mr. Chairman, that the United States galvanized many in the international community in support of our efforts to authorize only interim spending of the two-year budget of UN operations.  We would not accept a “business as usual” approach to U.N. reform.  
We are also about to begin a thorough top-to-bottom review of all mandates over five years old.  We have recently received and are reviewing a report issued by the Secretariat on program mandates.  This comprehensive program mandate review provides a long-overdue opportunity for all UN Member States to thoroughly assess the thousands of mandates, many of which are vague, unclear, redundant, and unproductive to sort out those that are still relevant to today’s problems from those that are duplicative or no longer needed.  This thorough scrub is exactly what is needed.  There will be disagreements among delegations no doubt.  While some will cling to special pet projects, the U.S. Mission has encouraged all to approach this review with a seriousness of purpose.  This review collectively affords us the best opportunity to realize budget savings, eliminate the significant waste and overlap which pervades the U.N. system.  
We should achieve tangible decisions for redirecting funding by the time the $950 million cap on the UN’s spending authority that we insisted upon is reached, and pave the way for future phases of mandate reviews as regular order of business in the UN.  As difficult as this task will be, we fully concur with Secretary-General Annan who stated unequivocally that, “Only by an effort this scale – a management reform as broad as it is deep – can we create a United Nations Secretariat fully equipped to implement all mandates, using its member States’ resources wisely and account for them fully, and winning the trust of the broader world community.”  I will be pleased to report to the Committee on the program mandate review at your convenience.  
We are also analyzing how different funding mechanisms influence or impact performance, such as whether an agency is receiving a voluntary or assessed contribution.  Many have observed that some agencies competing for funding against other non-governmental organizations or international institutions for the services provided tend to perform better.  They are more responsive to contributors and to their beneficiaries.  Catherine Bertini, former UN Under Secretary-General for Management and former head of the World Food Programme (WFP), for example, noted that, “Voluntary funding creates an entirely different atmosphere at WFP than at the UN.  At WFP, every staff member knows that we have to be as efficient, accountable, transparent, and results-oriented as is possible.  If we are not, donor governments can take their funding elsewhere in a very competitive world among UN agencies, NGOs, and bilateral governments.”
Scale of Assessments
Mr. Chairman, as you know, every three years there is a review of the scale of assessments of each member state’s dues to the United Nations.  Currently, the United States is the largest contributor – contributing some 22 per cent, a number we remain committed to as a ceiling as supported by Congress.  With specific regard to peacekeeping operations, our assessment is higher with a contribution of 27 per cent, although in accordance with U.S. law, our payments are currently capped at the 25 percent rate.  While the United States remains a strong supporter of a more effective, streamlined and efficient U.N., we do feel that other member states can and should contribute more.  
Currently we are exploring with other member states a variety of mechanisms through which a reform of finances can help achieve our shared goals.  One proposal we are considering is data on purchasing power parity (PPP) in our calculation of gross national income.  PPP is the numbers of units of a country’s currency needed to buy in the country the same amounts of goods and services in a different country.  At this time, the assessment is based on Gross National Income (GNI) as determined by Gross Domestic Product.  These numbers can be greatly skewed however by distortions introduced into the marketplace by currencies which are non-convertible and by other factors as well.  Currently, the World Bank uses PPPs as an analytical tool, but not for income comparisons.  
Applying more sound economic and financial rules to U.N. financing can also have implications more broadly for the scale of assessments debate.  As noted above, we have advocated in the Fifth Committee using PPP indicators in determining scale of assessments, although these indicators are not collected annually.  This has contributed to a lively discussion of relevant income comparison mechanisms.  Other delegations, of course, have also suggested other formulas.  This debate will help ensure a thorough vetting of the most appropriate indicators to use for the next UN scale.  
Reform of Peacekeeping Procurement & Operations
Mr. Chairman, at the beginning of my remarks I discussed how debates over management reform and improving efficiency can have a very tangible impact on real-world events.  The example I used earlier was on expanding the mission of the U.N. into the Darfur region of Sudan.  I would like to expand a bit on that remark to discuss some of the broader implications for peacekeeping as a whole.
We must always keep in mind that issues of waste, fraud and abuse in peacekeeping procurement are not simply about dollar figures.  Corruption and mismanagement can greatly hinder a Mission’s ability of a particular mission to effectively carry out its mandate.  Put differently, we are talking about saving lives, not only of the civilians we are trying to protect, but also the personnel of the contributing nations participating in peacekeeping operations.  Without accountable, cost-effective, efficient and transparent U.N. procurement practices, the U.N. will not have its essential goods and services, billions of dollars of contributions might be ill-spent or not properly accounted and the effectiveness of UN peacekeeping operations could be jeopardized.
The problem of procurement fraud, waste and abuse is one that directly affects our tax dollars as the largest contributor to the UN system, 22% in the regular budget, 27% in the case of the peacekeeping budget.  This means that the United States pays for one-fourth of the price in every case of fraud, waste, and abuse.
As Assistant Secretary Silverberg just remarked, we must make sure that OIOS maintains its independence so that it can serve as a catalyst for change.  OIOS must not have a free hand just to investigate procurement issues related to the Department of Peacekeeping Operations (DPKO), it must also have the autonomy and independence to continue investigating sexual exploitation and abuse at the hands of peacekeepers.  Failure to act on this matter will have profound implications for both existing and potential future peacekeeping missions.  We concur in full with DPKO's Under Secretary Jean-Marie Guehenno when he remarked last year that, “Indeed, it is precisely our image and reputation that gives us the credibility to work so effectively in war-torn countries and bring peace and stability to millions across the world.  Eliminating such misconduct is therefore integral to the success of peacekeeping.”
Conclusion
Mr. Chairman, thank you for the opportunity to speak with you today.  We look forward to working with the Committee now and in the future as we work together to achieve our shared objective of U.N. reform.  The issues we are discussing here today are among the most critical to resolve if we are to instill a culture of accountability, transparency and responsibility in the U.N. system.