Global Policy Forum

Finance Data of Organizations of the UN System: Present and Future Problems of Accountability


By Klaus Huefner

January 2009


As soon as we look at the purposes and conditions of money given to an institution of the UN system we will realize that differences occur, such as, e.g., between

- assessed and paid compulsory contributions,
- pledged and actually paid voluntary contributions
- compulsory and voluntary contributions,
- regular or special ("other") voluntary contributions
- cash or in-kind voluntary contributions
- voluntary government or private contributions or intergovernmental contributions

Numerically speaking, one US dollar is identical with one US dollar. However, one of the most important premises in comparing financial data over time is the insight that one US dollar does not necessarily equal one US dollar. Over time, inflation must be taken into account. One US dollar of 1946 less than 0.10 US dollar to-day. Furthermore, the UN system data exclude the activities of the Bretton Woods Institutions and partially also of IFAD. If included, differences must be made between loans on commercial terms, "soft" loans with a grant element of 50 or more percent, and grants.

Since 1994, the Administrative Committee on Coordination (ACC) publishes its famous reports on the "Budgetary and financial situation of organizations of the United Nations system" which appears on a bi-annual basis containing data since 1991 about the UN system (including the International Atomic Energy Agency (IAEA), but without the Bretton Woods institutions). Those reports contain the statistical information which appeared until 1990 as addenda to the "Report of the Committee on Contribution", as bi-annual supplement No. 11 of the Official Records of the General Assembly (Annex I: cash payments received/assessed contributions; Annex II: Voluntary contributions). In July 2008 the ninth report appeared, being the fourth one presented by the Chief Executives Board for Coordination (CEB). It contains a data collection of actual values until 2007 and expected values until 2009. The presentation format of the financial statements of the special funds and payments follows the recommendations made by the former ACC and now by its successor, the CEB. However, the over-all goal of reaching common inter-organizational accounting standards and harmonized presentations of financial statements remains unfulfilled if no attempts are made to improve the reporting mechanisms as well as the transparency of the reporting lines and of data definition being used.

In order to reach an optimum of comparability not only regular (core) resources must be distinguished from other resources, but also the composition and origin of those other resources must be made visible. In the case of the United Nations Development Programme (UNDP) those "other resources" consist of cost-sharing, government cash counter-part contributions, established trust funds, reimbursable support services activities and other miscellaneous activities (for details cf. below). In addition, there exist also two funds established by the General Assembly and administered by UNDP, namely the United Nations Capital Development Fund (UNCDF) and the United Nations Development Fund for Women (UNIFEM).

The impact of "other resources" is dramatic; although an increase of the regular resources could be observed over the last four biennia, those regular resources decreased proportionately. Whereas the regular contributions paid only increased from 916.3 to 1,108.2 mio US dollar between 2006 and 2007, the total income increased from 3,569.3 to 3,955.1 mio US dollar. This development implied that more projects were being executed on the basis of donor requirements and fewer projects were being executed through voluntary contributions in fulfilment of the objectives and the mandate of UNDP. During the last two biennia 2004-2005 and 2006-2007, UNDP was only able to perform about 20 percent of its total programme activities without specific donor requirements. The Board of Auditors expressed its concern in its Report of 2008 " that UNDP may be seen to be shifting more towards being driven by specific requirements of donors, its major source of funding (although those requirements are related to its goals), and less on its objectives and mandate as established by the General Assembly and its Executive Board" (A/63/5/Add.I, p. 33).

As mentioned above the data published by the UN are most often used not only by the research community but also by the governments of UN member states. However, the data must be used with caution. Mistakes of different types can be identified and are either of  a technical or of a methodological nature. Often, they can only be identified through secondary analyses of the data sets over time, e.g., in the case of identifying the top 10 contributors to selected special programs or funds of the UN (cf. the time series for a number of special programs or funds under:

A classical mistake of using modern information technologies occurs when the figures in single columns of a table are slipped by error. The Report of 26 October 2000 (A/55/525) offers such an example in the UNICEF column with the result that Armenia paid in 1998-1999 five to eight times higher voluntary contributions than Australia, whereas Austria did not pay anything (A/55/525, table 8, p. 44). The author drew the attention of the responsible people in Geneva to this, but although he received a letter of thanks promising to correct the mistakes, no corrections were made until January 2009 in the Internet version.

Similar mistakes occurred in the Report of 25 July 2002 (A/57/265) which also remained uncorrected until to-day: In the column presenting United Nations Population Fund (UNFPA) data, Australia did not make any voluntary contributions in 2000 and 2001; however, the correct data can be found under Austria, whereas Austria's contributions are mentioned under Azerbaijan (A/57/265, table 8, p. 43). A little further down Belize - instead of Belgium - offered voluntary contributions for 2000 and 2001 of 2.5 and 3.3 mio US dollars (cf. A/57/265, table 8, p. 43).

Even worse are the mistakes in the UNICEF column; until to-day these reporting problems have not been corrected in the Internet version. Total voluntary contributions of all governments are mentioned in an order of 862.9 mio US dollars for 2000, and of 1 806.4 mio US dollars for 2001, implying a fantastic jump from one year to the next one (A/57/265, table 8, p. 50). However, the UNICEF Annual Reports 2000 and 2001 mentioned only 718.6 and 769.4 mio US dollars for those two years. In a letter exchange, the UN Secretariat in Geneva argued that the author had overseen the private contributions to UNICEF. This, however, would have been a reporting mistake by UNICEF because in the past only the government contributions were published in this column. However, even if the private contributions - especially those from the UNICEF National Committees - would now also be taken into account, the "correct" figures would have been 1 118 mio US dollars for 2000 and 1 181.2 mio US dollars for 2001.

Especially disturbing are the figures for individual member states. Germany, for instance, contributed according the UN Report 39.6 and 74.5 mio US dollars for 2001 and 2002. However, the official UNICEF figures were with 4.681 and 4.480 mio US dollars much lower (A/57/265, table 8, p.45). Also the Report of 28 July 2006 (A/61/203) which contained a number of changes in content and format showed some inconsistencies. Again, UNICEF causes big problems although the UNICEF Annual Reports contain well documented statistical information. This UN Report of 2006 covers not only the years 2004-2005, but also the years 2002-2003 with figures which differ considerably from those of the UN Report of 2004. Without any reference to the "old" figures of 2004 "Receipts from States" were wrongly defined as contributions from governments and private actors. Germany, for instance, showed for 2003 the figure of 91.9 mio US dollars instead of 7.4 mio US dollars (A/61/203, table 2A, p.20). Needless to say that no corrections have been made in the Internet version.

Also, in the case of the Office of the United Nations High Commissioner for Refugees (UNHCR) severe mistakes of information handling are evident; whereas Germany, Finland, France, Italy, Japan, Netherlands, New Zealand, Norway, the UK and the US are presented as having nothing paid during the years 2002-2005, Gabon is listed as having contributed annually between 30 and 40, Myanmar between 61 and 79, Nicaragua between 39 and 62, Sri Lanka between 42 and 83, and even Iraq is said to have paid on the average 15 mio US dollars per year.

Furthermore, the UNDP data were suddenly "blown up" because they also included cost-sharing resources as mentioned above for 2004 and 2005. This can be best identified by comparing the figures of the UNDP total for 2002 and 2003 with those for 2004 and 2005 (cf. A/61/2003, p. 42). In the UN report of 2006, 640.352 and 770.432 mio US dollars were mentioned for the years 2002 and 2003 which corresponded to the official UNDP figures called "voluntary contributions pledged" (not received!). The figures for 2004 and 2005, namely 2,114.253 and 2,574.585 mio US dollars were much higher than those given by UNDP as "voluntary contributions pledged" which were 923.4 and 923.8 mio US dollars. Therefore, without any footnote of explanation the UN Report changed its reporting programme which led to the inclusion of cost-sharing resources. By definition, cost-sharing includes (a) resources provided by bilateral donor governments and multilateral organizations through UNDP (=third-party co-financing) and (b) resources channelled through UNDP by governments in support of their own development programmes (=programme country cost-sharing).

Furthermore, in table 5 on the percentage assessments to the budget of the Universal Postal Union (UPU) figures were extremely strange: according to them member states paid either 1 or 0 percent and sometimes in-between figures, such as 0.9, 0.66, 0.33 or 0.5 percent. The UK, for instance, was supposed to have paid 0.01 percent. Finally, in some cases no data were given at all: for instance, in the case of the United Nations Environment Programme (UNEP) for 2004 and 2005. The World Health Organization (WHO) did not report at all the assessments voted and received for 2004 (cf. table 6, p.59) as well as the percentages of the collection of assessed contributions for 2004 and 2005 (cf. table 7, p. 81). The author tried to communicate with the responsible administrator of the UN Secretariat in Geneva by mail and phone, but in vain. Deep silence and, even worse, no corrections in the internet version until January 2009.

The most recent Report appeared on 30 July 2008 (A/63/185). This tenth report is the fourth one presented by CEB. It contains a table of extra-budgetary resources (funds received) from all sources (by state and non-state donors) over the period 2002-2007 (table 2, p.8). In the cases of UNDP and UNFPA only "other resources" are included whereas the "regular resources" appear in another table under "approved regular budgets" thus referring to untied voluntary contributions (excluding trust funds, cost-sharing contributions or any other extra-budgetary contributions). The UNICEF data include again the contributions from the private sector, especially from the National Committees, in addition to the regular and other resources given by the governments. In contrast, UNDP data do not include the other resources. The data are only given for regular (core) resources but differ from those given in the UNDP Annual Reports (e.g., for Norway in 2006: 85.1 instead of 108 mio US dollars, in 2004: 76.3 instead of 97.8 mio US dollars, in the case of Germany: for 2004 23.3 instead of 33.3 mio US dollars).

In table 2A on extra-budgetary resources from member states: funds received (2002-2007) the "European Community" suddenly shows up (A/63/185, p.26 and 27) with figures for UNHCR, the Food and Agriculture Organization (FAO), the International Fund for Agricultural Development (IFAD) (2006-2007), UNEP (2006-2007) and the United Nations Framework Convention on Climate Change (UNFCCC) (2004-2007). Table 2B dealing with extra-budgetary resources from non-state contributors: funds received (2002-2007) offer a fuller picture about the financial engagement of the European Commission, but thereby also repeating the figures for the UN institutions mentioned above (A/63/185, pp. 66 and 67). They are identical with one exception: the UNEP figure for 2006 in table 2A is 4,646 mio US dollars, whereas in table 2B 3,035 mio US dollars are mentioned. The first question relates to the differentiation between "European Community" and "European Commission" and the second one to the highly selective approach in table 2A. The wrong placing in table 2A also implies that the total aggregates for the five institutions must be reduced by the figures given for the "European Community".

Another UN Report is of interest which deals with a "Comprehensive statistical analysis of the financing of operational activities of the United Nations system: 2006 update" (A/62/326 of 1 September 2007) published by the Department of Economic and Social Affairs (DESA) of the UN Secretariat since 1980. This Report contains not only detailed statistical information, but also a comprehensive analysis of the financing of operational activities for development of the UN system (of course, without the Bretton Woods institutions). This Report also mentions explicitly that the 2006 data "are provisional because of the time needed to ensure the accuracy and consistency of all the disaggregated data reported in the replies of the different United Nations organizations". (A/62/326, p. 5). In order to reduce the two-year lag to one year, DESA will make efforts to strengthen its data collection system. Although attempts are being made to distinguish between core and non-core / other resources, a common definition of core funds is still lacking.

Also, attempts of harmonizing the UN data with those of the Development Assistance Committee (DAC) of OECD on contributions to the UN system are made. Since the early 1990s DAC started to report only the core contributions to the UN system, treating non-core contributions as bilateral and no longer as multilateral assistance - no matter whether the earmarking for programmes has been made by the organization of the UN system or by the donor state. Those and other issues concerning, inter alia, inclusion - exclusion differences of cost-sharing contributions as mentioned above, the inclusion of NGO and private contributions and the taking into account of both inflation and exchange rate movements demand joint efforts towards a more consistent approach. It would also be desirable to "reconcile" the content of both UN Reports undertaken by CEB and DESA.

In conclusion, it should be stressed again that technical as well as methodological mistakes should be explicitly corrected in future publications and also in the Internet versions. It is difficult to understand why technical errors which can be easily corrected continue to remain in the UN publications. In the case of methodological issues one has to distinguish between obvious ones such as the counting of the income from private sources as "receipts from states" as happened in the case of UNICEF, which seems to be based on political reasons, and more complex ones such as, e.g., the differentiation between core and non-core contributions which exist in some UN special funds and programmes but not in all of them. Any reclassification as well as the introduction of new definitions should be made explicitly - at least in corresponding footnotes to the tables concerned, better also in the overall introduction.

The political use and abuse of financial data is well-known. But the "magic of the figure" can be reduced if the highest degree of transparency of the methodology applied is guaranteed. "Continuing efforts to work towards a comprehensive and sustainable United Nations system-wide financial data and reporting system" (A/63/71, p.2) are necessary and most welcome.

Despite all these efforts one should keep in mind that there is, for the time being, no "correct" series of data given the dependence on numerous definitional limitations which are made only partly transparent. Therefore, the collected series of data qualify only as "proxies" for the description of reality and must be interpreted with the appropriate caution.


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