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Viewing cable 05GENEVA1742, UNHCR: 2006 BUDGET CONSULTATIONS AND STANDING
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| Reference ID | Created | Released | Classification | Origin |
|---|---|---|---|---|
| 05GENEVA1742 | 2005-07-18 12:04 | 2011-08-25 00:00 | UNCLASSIFIED | US Mission Geneva |
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 04 GENEVA 001742
SIPDIS
PRM/MCE AND REFCOORDS
E.O. 12958: N/A
TAGS: PREF UNHCR
SUBJECT: UNHCR: 2006 BUDGET CONSULTATIONS AND STANDING
COMMITTEE DISCUSSION
REF: A. GENEVA 1604
¶B. GENEVA 1605
¶1. (U) SUMMARY: Donors and staff of the United Nations High
Commissioner for Refugees (UNHCR) have held multiple
discussions as UNHCR shapes its 2006 budget and its plans for
the second half of 2005. In all of these discussions, UNHCR
has highlighted its (new) commitment to results-based
management -- which it defines in the budgetary context as
starting with needs assessments, setting a hierarchy of
objectives at the beginning of planning, involving partners
in these processes, and defining both total needs and the
smaller sub-set of activities which UNHCR will cover. The
planning-for-2006 process has not yielded consistent results
and donors still are presented budget figures without a clear
picture of the underlying needs. However, the process was
less arbitrary than in past years. Donors will now be
confronted with a larger annual budget more accurately
reflecting needs. Current under-funding of the 2005 budget,
however, leaves room for worry about whether the more
comprehensive 2006 budget will garner the necessary support.
Some donors have objected to UNHCR's budget continuing to
rise while the worldwide number of refugees declines.
¶2. (U) Summary, continued: UNHCR is proposing a 2006 budget
of USD 1,144.3 million, including some USD 70 million for
Chad. Meanwhile, the organization expects a possible
shortfall of USD 136.1 million under its current 2005 annual
budget (AB) and is imposing a 10 per cent freeze on its
administrative and headquarters budget and a 7.5 per cent
freeze on field activities. Refs A and B report on the May
"informal" consultation with key donors; this meeting was
followed June 14 by another "informal" meeting with all
Executive Committee (EXCOM) members and Standing Committee
observers. A third session took place during the first day
of the Standing Committee (SC) session, June 27. END SUMMARY.
---------------------
2006 BUDGET HIGHLIGHTS
----------------------
¶3. (U) Presenting the 2006 budget to donors during the
Standing Committee session, UNHCR Controller Takizawa
acknowledged that the USD 1,144.3 million figure was USD 162
million more than the 2005 annual budget (AB). Initial
program submissions from field offices and headquarter units
for 2006 amounted to USD 1,158.7 million. Needs totaling
another USD 70 million were identified to "mainstream" the
Chad Supplementary Budget (SB). After an extensive review
process, these submissions were reduced to USD 1,144.3
million (including Chad.) The largest increase from 2005 was
40 per cent in Africa (USD 110 million). Further increases
included USD 5 million for Asia and Pacific; USD 7 million
for Europe; USD 5.5 million for the Americas; USD 8.2 million
for Global Operations; and USD 17 million for Headquarters.
There was no increase in the CASWANAME region. Takizawa also
attributed increases, especially in HQ costs, to exchange
rate variations. This provisional amount corresponds to an
increase of some 16.6 per cent over the 2004 Annual Program
Budget.
¶4. (U) Takizawa expressed concern about the "fundability of
the budget." He noted that the 2006 AB figure was roughly on
par with the total 2005 budget (AB and supplementary budgets
(SBs).) UNHCR hoped it would be okay in 2006, if there were
no new emergencies requiring SBs; if impending emergencies
in some regions could be balanced by phase-out in others; and
if the impact of exchange rate fluctuations and inflation was
minimal. This was a worrying set of assumptions.
-------------------
2005 BUDGET STATUS
-------------------
¶5. (U) UNHCR's Executive Committee approved budgetary
requirements for 2005 amounting to USD 981.6 million,
comprising USD 945.8 million for the AB (including USD 62.5
million and USD 50 million respectively for Operational
Reserve Categories I and II), USD 28.8 million for the United
Nations Regular Budget and USD 7 million for Junior
Professional Officers (JPOs). However, the AB was increased
by USD 7.3 million to USD 988.9 million in order to absorb an
additional Regular Budget allocation related to unbudgeted
security enhancements at UNHCR,s Headquarters (USD 5.8
million) and USD 1.5 million to the JPO budget. The 2005 SBs
currently amount to USD 375.6 million.
¶6. (U) As of June 22, the total voluntary contributions
received in 2005 against these requirements amounted to USD
873.1 million, including USD 689.3 million for the AB, some
USD 171.7 million toward the SB, USD 3.7 million toward JPOs,
and USD 8.4 million in reserved pledges. UNHCR believes the
AB is under-funded compared to 2004 because the SBs are
"competing" with the AB and drawing away funds.
¶7. (U) At the June 14 meeting, Takizawa reported that funds
were lower than expected, primarily due to less carryover
from 2004 and exchange rate losses. As a precaution against
such potential funding shortfalls, the High Commissioner in
early 2005 imposed caps on the program and support budgets.
Thus, program and non-staff administrative budgets were
capped at 95 per cent. The caps were implemented at the
bureau level rather than the country level.
¶8. (U) At the Standing Committee meeting on June 28, UNHCR
announced that it expects further funding shortfalls, with an
estimated USD 225 million deficit (including a USD 136.1
million shortfall under its 2005 AB.) As a result, UNHCR
will do a second round of capping -- going up to 10 per cent
for support and headquarters, and up to 7.5 per cent for
operations. The High Commissioner decided to cap operations
at a lower level than services, UNHCR said, in order to
minimize the impact on the field.
¶9. (U) Deputy High Commissioner Wendy Chamberlin noted that
caps are a signal to partners and managers that UNHCR will
not meet "project or program" targets. However, at the end
of the third or fourth quarter, UNHCR will evaluate the
situation and possibly lift the caps. Factors that will
impact this decision include additional contributions,
reduction in ambitions and activities, and perhaps most
optimal, management efficiencies.
-----------------
BUDGETARY CONCERNS
-----------------
¶10. (U) At both the June informals and the Standing
Committee meeting (SC), delegations asked about the
relationship between the number of beneficiaries UNHCR serves
and the budget, arguing that with the number of refugees
decreasing, the budget should as well. External Relations
Director Anne Willem Bijleveld asserted that UNHCR is not
meeting minimum standards in many cases. The budget should
not decrease until UNHCR is able to meet this core objective.
At the SC, Takizawa warned delegates not to link only
population trends with the budget, as other factors such as
exchange rate losses and inflation have an influence.
Takizawa noted UNHCR is anticipating a fall in the dollar in
2006 and has budgeted approximately $30 million against that
expectation. UNHCR also has increased its population of
concern from to 17 million to almost 19 million with IDPs and
stateless persons among the increase. Some delegations
complained UNHCR's budget growth seemed "almost systematic"
over the last years.
¶11. (U) Takizawa explained that UNHCR has changed how it
budgets staff costs. UNHCR previously budgeted on the basis
of a certain percent of posts being vacant, but closer
examination had revealed a near 100 percent employment rate,
even though some (paid) employees were on leave or in transit
between posts. Delegations requested more information on the
status of staff-in-between-assignments (SIBAs) and expressed
concern that some employees stay in that status for prolonged
periods, not working but being paid. While asserting most
SIBAs are only in that status short term and perform other
functions in the interim, Takizawa acknowledged some were not
contributing. Takizawa promised to provide papers on how
UNHCR will now budget staff costs as well as on UNHCR's
planning for currency fluctuation
¶12. (U) At the SC, several delegations expressed concern
over the impact of both potential deficits and potential
surpluses on UNHCR's activities. Chamberlin explained that
UNHCR did not want a budget deficit or a carryover, as either
one implies failure to budget and plan correctly. However,
according to Takizawa, it would be a problem if UNHCR reduced
the carryover to zero. Instead, Takizawa suggested that a
carryover of USD 20 to 40 million was reasonable.
------------------------------
RUNNING THEMES: RBM, NBA, COP
------------------------------
¶13. (U) Reviewing again the status of UNHCR's efforts to
move towards Results-Based Management (RBM) (see reftel),
Chamberlin updated donors at the Standing Committee on
developments since the May informal donor consultations. As
was mentioned in May, Chamberlin noted that UNHCR would focus
on RBM by having a resource-based budget, creating a
participatory planning process, determining refugee needs at
the start of the planning process, seeking increased
contributions (including from partners), and recognizing the
gap between needs and resources. In keeping with earlier
statements, Chamberlin stressed "greater empowerment to the
field in the resource allocation process."
¶14. (U) In all three budget discussions, UNHCR officials
reviewed how UNHCR's budget process for 2006 specifically
called for a comprehensive needs-based assessment (NBA) to
inform the Country Operation Plan. Most field offices
submitted their requests with some sort of NBA, although the
quality of the assessments varied. These submissions were
reviewed for content and consistency at Headquarters, which
-- "for the last time in 2006" -- also considered allocations
across programs against a ceiling of USD 1.1 billion,
established based on their calculation of what donors would
consider fundable. The "raw" assessments from the field
defined needs of approximately twice that figure.
----------------------
MANAGEMENT EFFICIENCIES
----------------------
¶15. (U) As she did in May, Chamberlin again repeated at the
June informals and Standing Committee that UNHCR's goal was
"no net growth" for 2006, particularly for headquarters. In
response to a U.S. question about which activities had been
reduced to reflect a lower Global Operations budget,
Chamberlin stated that they have limited activities in
headquarters to standard setting in order for resources in
the field to focus on implementation of activities.
¶16. (U) Additionally, Chamberlin stated that UNHCR made an
effort not to increase staff at headquarters. To this end,
UNHCR undertook a "90-10 prioritization exercise" --
directors had to identify the least necessary 10 percent of
their budgets with the understanding that they would be asked
to give up these activities to fund anything new. However,
Chamberlin opined that 90-10 did not work very well.
Instead, managers self-managed and came back to the table
with close-to-zero net growth. Five positions for Burundi
and Chad were incorporated as those programs shifted from SB
to AB, several other positions were added but offset by other
reductions: these include 4 positions added to the Inspector
General's Office and 2 positions focused on organizational
development.
¶17. (U) UNHCR also provided RMA with a document (faxed to
PRM/MCE and PRP) showing where 196 new permanent posts were
created in the field. Some of these posts were previously
filled by consultants or technical advisors. Increases were
partly offset by a reduction of 49 posts in CASWANAME. Some
86 requests for positions were denied. Responding to U.S.
questions, UNHCR said that in the Americas, 14 positions
would be posted to Colombia, Ecuador and Venezuela and 2
positions will focus on private sector fundraising in the
U.S. and Canada. Two additional field posts for Europe,
funded by transferring money from the Division of External
Relations, will focus on private sector funding, particularly
in Italy and Greece. Additionally, one post was regularized
from Operational Reserve II for Chechnya
-------------- ---------
Internally Displaced Persons - IDPs
--------- ---------- ----
¶18. (U) New activities for IDPs were not included in the
2006 budget. However, with new High Commissioner Guterres on
board, UNHCR is in the process of "realigning" its IDP
policy. UNHCR officials have suggested that when the
population is a mixture of IDPs and refugees, funding for
activities should come out of the AB; however, if either the
UN Country Team or the UN Humanitarian Coordinator requests
UNHCR to undertake activities solely for IDPs, funding should
be financed by a SB. Takizawa noted that if the IDP policy
were to change, financial rules might also need to change,
particularly to allow a multi-year SB.
¶19. (U) At the SC, USdel expressed concern about UNHCR's
taking on increased responsibilities, such as camp
coordination activities for IDPs in Darfur and developing
programs for stateless people, at the cost of refugee
programs. However, other delegations such as the Sudanese
delegation expressed a desire for more funds to be given to
IDPs.
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Inspector General's Office - IGO
-------- ---------------
¶25. (U) At the request of the Swedish delegation during the
SC, Chamberlin explained why the candidate preferred by the
Inspector General and assignments board for the
Investigations post was passed over in favor of the No. 2
candidate. According to Chamberlin, managers do not receive
their first choice in almost 20 per cent of P5 and D1
assignments due to organizational needs. In this particular
situation, Chamberlin reassured member states that Candidate
No. 2 was selected because of his higher qualifications in
relevant experience and legal knowledge. Chamberlin outlined
the selection process and dealings with the Inspector General
to alleviate concerns that the IGO would not be independent.
--------------- ------------------
SPECIFIC QUESTIONS POSED DURING DISCUSSIONS
--------------- -------------------
¶26. (U) In response to questions posed by the U.S., UNHCR
representatives provided the following answers:
- Funds in West Africa are not/not adequate to meet needs,
but UNHCR has to prioritize in the region and therefore has
reduced care and maintenance activities in Guinea and also
scaled down activities in Sierra Leone.
- Activities for Togolese refugees were not included in the
AB; USD 1.5 million was allocated from the Operational
Reserve I (ORI).
- The SB for the Democratic Republic of Congo was not
included in the 2006 AB because of uncertainties on how the
situation will develop. UNHCR is taking a "multiyear"
approach (although their 3-year repatriation plan was not
approved) because significant returnee areas have opened up
and they are unsure of the level of funding needed from the
SB.
-Responding to concerns about UNHCR's engagements outside its
mandate, Chamberlin said that certain earmarked funding for
the tsunami could not be moved around or returned. UNHCR had
been asked by the UN system to reactivate its projects in
Aceh, but Chamberlin acknowledged that such activities fell
outside UNHCR's core activities. (USdel encouraged UNHCR to
increase consultations with member states prior to embarking
on activities that go beyond UNHCR's refugee mandate.)
¶27. (U) Representatives from the Netherlands, Canada, Japan
and Switzerland inquired at the June informal whether the
proposed position for an Assistant High Commissioner was
budgeted for in the 2006 AB. UNHCR representatives responded
that because of attempts to mainstream Convention Plus, the
position was indeed included as a placeholder, pending the
High Commissioner's and ExCom's approval. If this position
is approved and created, a D2 position will be abolished and
an A/SYG position created in its place at an increased cost
of USD 30,000. (Note: The four countries listed are
skeptical about the position and were not happy that UNHCR
budgeted for a position that is not yet approved.)
¶28. (U) In response to a question about broadening UNHCR's
donor base, UNHCR acknowledged that the gap between funding
and the budget is widening (the donor base has increased by
30 per cent, yet expenditures increased by 50 per cent).
UNHCR continues to seek ways to close this funding gap,
including by targeting the private sector.
Moley