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Cablegate: Usunesco: 172nd Executive Board Report On F&A

This record is a partial extract of the original cable. The full text of the original cable is not available.

241015Z Oct 05




E.O. 12958: N/A

1. There was no controversy surround in the work of
the F&A Commission at the 172nd UNESCO Executive Board.
Agenda items 4, 6, 12, 34, 41, 49, and 53 items were
requested to be forwarded to the PX Commission with no
discussion in F&A. Of these USDel requested that Item
6 be discussed.

2. Agenda Item 39: The U.S. Delegation made comments
on our two areas of concern, the slow progress in
developing in-house facility management expertise and
the continuing problems with managing and monitoring
their extrabudgetary program. The Italian delegation
also raised concern with facilities management and
questioned the issue with support costs for
extrabudgetary programs. Other Dels raised a variety
of questions. The Secretariat representative responded
to the questions on the extrabudgetary programs by
discussing the efforts of the Working Group that has
been established. She also acknowledged that there is
a problem with the management and implementation of
these programs but that they are making an effort to
improve and asked for the Board's patience in this
area; that full progress would be presented by next
Spring. She attributed much of the problem to poor
planning for these projects, lack of personnel or
expertise and an insufficient execution plan. She said
a report on support costs for extrabudgetary projects
would be completed 2 November and that the table for
implementation and accountability is being completed.
On facility management, the Secretariat stated that IOS
is looking at issues such as an inadequate inventory on
non-expendable equipment. He also said that they rely
heavily on interagency solutions for some facility
issues. Decision adopted noting the status of these
items and requesting the D-G to forward to GC with EB

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3. Agenda Item 33: USDel raised concern with the
action requested under this agenda item and asked
whether it necessitated the suspension of Fin Reg
4.3/4.4. U.S. Del also questioned why this practice
persists and urged the Secretariat to discontinue it.
This generated much discussion from the other Dels.
Japan also questioned the applicability of the time
limit in the Fin Regs. Russia backed this up by asking
if this Reg doesn't apply, what does govern? The
Secretariat replied that Fin Reg 4.3 does govern but

that the time limit does not apply to those items
addressed by the phrase "other legal obligations".
These are not subject to the 12-month period because
this phrase is intended to capture unforeseen legal
obligations that cannot be executed within a time
limit. Japan acknowledged this, but asked whether the
items being requested truly were unforeseen legal
obligations. Legal Council offered some explanation
for this and for some of the expenses it was
reasonable-but for others such as over-expenditures in
field offices, the Board agreed these were poor
management/internal controls and not unforeseen legal
obligations. The Board then turned to the draft
decision. The U.S. questioned that if this action is
governed and allowable by the Fin Regs why does the
decision need to contain language that the Board
"approves" it. It seemed the Secretariat is just
trying to "legitimize" the practice as it has in the
past (though we didn't say this). Canada backed this
up. Dels urged that there not be a continued balance
in ULOs and that this practice if used in the future be
limited to truly unforeseen legal obligations (i.e. law
suits). After lengthy discussion on the language,
acceptable changes were made to the draft decision and
it was adopted. There was not any language
"approving", just "noting", and added language urging
the Secretariat to discontinue this practice to the
greatest extent possible.

4. Agenda Item 35: U.S. Del made a statement that we
do not support external borrowing, cannot pay interest
on it due to U.S. domestic law, and have not seen any
evidence that it is needed based on the Organization's
cash position and WCF. UK also indicated they do not
support external borrowing. Many other Dels spoke
about urging non-payers to pay and implementing
stricter penalties besides losing a vote, especially
for those not in compliance with payment plans. It was
decided this was a matter of changing the Constitution
and not really for action under this agenda item. Many
Dels did not want to see UNESCO implement external
borrowing but raised the point that if it did, interest
should only be paid by non-payers for the year where
the borrowing was necessary. Otherwise, they felt,
payers were penalized and had to pay interest when they
had paid on time. External borrowing authority will
ultimately be taken up at the GC, and we need to be
prepared to try to stop approval of this authority and
if necessary, to respond to the question of only non-
payers paying interest. Most Dels did not have as
strong a position as we did on this. The Secretariat
representative gave what was essentially a lecture
(note: we felt this was largely directed at the U.S.)
that many Member assessments are not paid on time and
to couple that with denying the authority for external
borrowing was constraining and tied their hands. He
said it leaves them no safety net and makes managing
the organization and cash flow too risky. Japan stated
that it may be necessary to allow such a safety net in
this context. The draft decision was adopted; it
contains no language on external borrowing.

4. Agenda Item 3: There was little discussion on this
item and the draft decision was adopted with no

5. Agenda Item 21: USDel stated that we are not
supportive of this approach overall but we did not
block consensus on it. We indicated that we think
these costs should be included in the regular budget
and the organization must continue to prioritize to
achieve this. We asked some questions with regard to
the operation and management of the Special Account and
stated there should be no indicative minimum. Iceland
pushed for further prioritization and the need to
identify programs that could be ended. France also
stated that they did not like the approach in that they
did not think it was acceptable to rely on voluntary
contributions for priority programs. Japan stated that
they too felt it was not a good answer but it was a
compromise they could accept given the discussions of
the last EB. The UK said they would accept it but
didn't like it because they do not feel the $610 budget
represents a re-ordering of priorities, which is what
was asked for by the last EB. They added that if
UNESCO can only get governments to agree to fund
priority programs through voluntary contributions, it
should be a warning sign to the Organization. Germany
also came out against the approach of a Special Account
but will accept it. Brazil stated they are generally
pleased with the efforts of the Secretariat and the
results. The Secretariat responded to questions. The
programs funded by the Special Account are already
ongoing, supported by the Regular Budget so they say
there will be no major disruption created when the
Special Account is ended. The Special Account will
function in accordance with the Fin Regs and there is
no indicative minimum-it is optional. They also stated
that when they try to pinpoint activities to end, some
Member States always object so they need support in
this area. The Board turned to the language of the
draft decision and revisions were made. 33C/6 was
included in the language, which includes points and
decisions made at the previous EB. "Welcomes" and
"Welcomes equally" were deleted. France tried to add
some language stating that we recognized the risks
being taken by funding regular program activities with
voluntary contributions, but the U.S. and UK disagreed
with its inclusion and after discussion it was
eventually withdrawn.

6. Agenda Items 13, 14, 15, 16, and 61 and 50, 60, and
7 were clustered for discussion purposes. U.S. Del
raised points regarding the need for a more strategic
approach to Category II centers in the future, and that
we would like to see a strategic analysis of these
centers. Dels with specific interests in the Centers
discussed their benefits. Iceland raised the concern
that the creation of too many centers was diverting
resources away from UNESCO priorities. Other Dels
supported this and raised points on the feasibility
studies being done. The Secretariat stated that these
Centers are not proposed by them but by inter-
governmental groups or Members and that a feasibility
study is done for each one over a period of
time-they're not entered into lightly. They also
stated that the Centers are very cost effective and
cost benefit analyses on them would prove favorable.
The intergovernmental groups such as IHP regularly
evaluate them. He believes they can present a better
overall strategic analysis and report on them after
these centers have been operating for some period of
time. He took note that the Member States believe this
is required and agrees with it. Draft decisions were
adopted with minor language revisions.

7. Agenda Item 49: A report was issued by the D-G
following the meeting of Experts recommending delaying
a decision until the next Executive Board. A
Feasibility Study had not been done yet. Canada
suggested that because it was a policy decision, it
should be delayed until the 34th GC. U.S. Del
supported this, adding the benefit of reviewing it in
the context of the entire program for the next
biennium. Japan supported this position as well. The
decision was adopted in line with this view.

8. Agenda Item 56: Many Dels spoke in support of this
item. The decision was adopted with no changes.

9. Agenda Item 11: Many Dels spoke in support of this
item. U.S. Del had instructions not to be the first to
raise issues with the proposed visits to China for
literacy award winners and to only follow on in support
of comments made by Korea (which is not on the
Executive Board) or presumably if another Del had
raised. No other Dels raised any objections or issues.
The decision was adopted with no changes.

10. Agenda Item 10: U.S. Del made comments with regard
to our support of the Decade and the Implementation
scheme, and indicated that UNESCO should provide
leadership in this area within existing resources.
U.S. Del suggested two changes to the draft decision.
Both were agreed to and the decision was adopted.
There was little discussion overall.

11. Agenda Item 59: Many Dels spoke in support of
this. U.S. Del expressed concern with establishing the
Committee at this time. UK suggested that language
needed to be included in the statutes reflecting that
the Committee and its work should be reviewed at some
interval. Canada proposed the size of the Committee
needed to be evaluated and possibly reduced. A Working
Group was created to amend the statutes, which was
successfully done. The decision was adopted based on
the amended statutes, which cut the size of the
Committee from the present 44 to "up to 20" and include
a sunset provision, reportedly a first in UNESCO.
Authorization for the Commission will expire in four
years. A comprehensive evaluation will be performed
and presented to the Executive Board in Spring 2009,
which will issue a recommendation to the General
Conference as to whether to renew the Charter.

12. Agenda Item 6: U.S. Del made comments that at a
time when UNESCO is not on track for meeting EFA goals,
it needs to focus on urgent education issues and not
divert resources to marginal initiatives, and that it
should not seek to allocate funds to a normative
instrument when they would be better spent on
priorities. UK endorsed our position. Czech Republic
also supported. Canada asked for the exact allocation
of funds for this activity. The Secretariat responded
that there is $50,000 allocated to the development of
the Charter-which everyone agreed was not realistic.
There was also discussion on how we need to consider
the recommendations of MINEPS. The Legal Advisor
responded that there is no legal obligation, just
advisory. There was discussion as to the appropriate
way to deal with normative instruments between the PX
and F&A committees. There was much discussion on the
language of the draft decision. U.S. Del proposed
deleting paragraph 3. UK supported. Bangladesh
suggested adding language to this paragraph instead.
France and Italy suggested this paragraph should be
decided by PX. This was eventually agreed to after
much debate. We tried to change the language in
paragraph 5 to "Taking note" instead of "expresses its
gratitude". This eventually ended the same as the
discussion for paragraph 3. U.S. Del worked with
Canada on new proposed language for paragraphs 6 and 7.
After lengthy debate and suggestions from other Dels,
the draft decision was adopted with the new language.

13. Agenda Item 37: U.S. Del acknowledged progress made
in this area, encouraged it continues and indicated our
concern with the geographic representation formula.
Other Dels praised the report and the progress that's
been made. There was some language added to the draft
decision urging the Secretariat to continue making
progress in this area and the decision was adopted.

14. Agenda Item 38: U.S. Del raised questions with the
cost estimate for the subcontract and stated our
objection to carrying forward the surplus to cover this
recurring operating cost. Russia agreed with these
concerns and asked for some comparison with other UN
agencies. Japan stated that they also do not agree
with this practice, however, they are willing to accept
it (reluctantly) and if it's an "exception". UK,
Germany and Brazil echoed same position as Japan-no one
liked it but was willing to accept it. The U.S. was
isolated in our objection to this. In drafting the
decision language, some changes were added to emphasize
that it was an "exception" or "one time" thing.
(Comment: We think these inserts were fairly
meaningless overall but are somewhat of an improvement
over approving it with no comment.)

15. Agenda Item 40: This item generated much
discussion from a variety of Dels mostly with regard to
the relationship between the Executive Board and the HQ
Committee, the history of developing the HQ Committee
as a subsidiary body to the GC instead of the EB, etc.
There was also clarification requested with regard to
how the Starck project would be funded and what role
the EB had in approving work or funds for these
projects. The Legal Advisor finally gave a clear
response to this by referring to Fin Reg 7.3. There
was a very lengthy discussion on one of the paragraphs
of the draft decision; modifications were eventually
agreed to ensuring that the HQ Cmte consider Fin Reg
7.3 and asking them to look into other possible
alternatives for the Starck project other than that
already proposed. It was adopted as amended.


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