UNOPS turns into an entirely self-financing entity in UN system
UNITED NATIONS, Aug 25 (G77)- As a self-financing entity in the U.N. system, the U.N. Office for Project Services (UNOPS) has turned out to be one of the most efficiently run organisations in the world body.
In 1996, total income amounted to $36.8 million while administrative expenses totaled $32.2 million, leaving a surplus of $4.6 million. In 1997, total projected income of $40.6 million contrasts with expenses amounting to $38.5 million, which would result in a surplus of $2.1 million.
Unlike most U.N. bodies which are perpetually in the red and fully dependent on voluntary contributions for their survival, UNOPS works on a self-financing basis in a competitive environment. It is a general contractor providing services in all areas of activities in which the U.N. is engaged in.
In a report released in early August, the Advisory Committee on Administrative and Budgetary Questions (ACABQ) said the rapid increase in programme delivery that started in 1995 and continued in 1996 is directly related to the implementation of the UNOPS reform and the introduction of new work methods, together with enhanced computer-based information systems.
The ACABQ says that UNOPS has made cautious and conservative assumptions with regard to the types and extent of risk exposure and that although it has recovered from the downturn of 1993-1994, it has concluded that it is premature to expect that the positive results of 1994-1995 would establish a long-term trend.
The Committee says it is also aware of the continued decline in overseas development assistance to U.N. development activities, which will affect the overall resources available to the U.N. Development Programme (UNDP), and consequently, the demand for UNOPS services.
Currently, the largest share amounting to 37 percent of UNOP's portfolio, is from UNDP, followed by Management Services Agreements with international financial institutions and bilateral donors (especially Japan), with 30 percent. Others include UNDP Trust Funds, the Global Environmental Facility (GEF) and the Montreal Protocol, with 19 percent. Governments of recipient countries and other U.N. agencies and programmes amount to about 14 percent.
For the 1998-1999 biennium, UNOPS has projected its total income at about $84.7 million, with proposed expenditures also at $84.7 million, leaving no surplus income.
ACABQ says it doubts that the increases in project delivery can be sustained in 1998-1999. "The Committee trusts that the UNOPS resources will continue to be managed in a manner consistent with its self-financing status. The Committee notes that UNOPS is confident that the tools it has developed-- the Financial Management Model and the business planning process-- will permit it to maintain a tight balance between providing quality of services and competitive administrative overhead costs."
Currently, UNOPS also has offices in Copenhagen, Kuala Lumpur, Geneva, El Salvador and Nairobi. A new office is to be opened in Abidjan shortly.