Madam Chair,

1. I have the honour to deliver this statement on behalf of the Group of 77 and China on agenda item 136: Financial reports and audited financial statements, and reports of the Board of Auditors on the United Nations peacekeeping operations.

2. At the outset, the Group extends its appreciation to Mr. Richard Bellin (France) the Director of External Audit and Chair of the Audit Operations Committee of the Board of Auditors, for introducing the report of the Board of Auditors on United Nations peacekeeping operations for the 12-month period from 1 July 2023 to 30 June 2024. The Group also extends its appreciation to Mr. Chandru Ramanathan, Assistant Secretary General and Controller, and Ms. Juliana Gaspar Ruas, Chairperson of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), for introducing their respective related reports.

Madam Chair,

3. The Group of 77 and China recognizes the important role played by the Board of Auditors in providing independent and professional external oversight of the Organization. We commend the quality of the Board's reports and their valuable recommendations, which contribute significantly to enhancing transparency, financial discipline, and operational efficiency across peacekeeping operations.

Madam Chair,

4. The Group expresses serious concerns over the growing financial deficit, which has more than doubled to $541.9 million, driven primarily by liquidation of MINUSMA and significant drop in assessed contributions.
 
5. The Group is further concerned by the delays in implementing both past and newly issued recommendations. Implementation of past recommendations out of 53 endorsed recommendations, only 14 were fully implemented, 38 remain under implementation including 19 recommendations from last year's report and 5 that have remained pending for over three years. The Group notes with serious concern that the continued decline in the implementation rate of the Board's recommendations during the past four years has decreased from 60% to 45% to 32% and just 26% in 2023/2024.

6. In this regard, the Group reiterates its request to the Secretariat to enhance its efforts to implement the endorsed recommendations of the Board in a timely manner, take effective measures and put in place robust accountability mechanisms for unjustified delays in the implementation of the outstanding recommendations.

Madam Chair,

7. The Group also notes with concern the recurrence of findings and recommendations from prior audit cycles, alongside new operational challenges. The current report highlights significant shortcomings, particularly in supply chain activities, such as data quality issues in the Supply Chain Planning Tool, weaknesses in key performance indicators for demand planning and deficiencies in due diligence controls on contract administration regarding performance securities provided by contractors. The Group also notes with concern deficiencies in the management of camp reconstruction projects. We look forward to engaging the Secretariat on the corrective measures taken in this regard.

8. The Group also expresses concern over the low cash ratio of peacekeeping operations, which stood at 0.30 for active missions as of 30 June 2024, with several missions facing liquidity stress. This has been largely attributed to the non-payment of assessed contributions. The Group renews its call for all Member States to pay their assessed contributions in full, on time, and without conditions, in line with their Charter obligations.

9. We also highlight the need for enhanced efforts to promote awareness and prevention in peacekeeping operations. The report notes gaps in fraud risk assessment and monitoring, which must be addressed to ensure financial integrity and protect the reputation of the Organization.

10. The Group has carefully reviewed the financial statements and audit findings to identify systemic concerns that merit further discussion. In the upcoming informal consultations, we intend to raise key issues including risk management and its integration with the accountability framework, delegation of authority, internal control mechanisms, asset management, ICT systems, procurement practices, project management, and the functioning of Umoja.

11. On the matter of cost-recovery arrangements, the Group notes that the financial statements reflect an accumulated surplus of $95 million as of 30 June 2024. We would appreciate clarity from the Secretariat on the basis for this surplus and how it aligns with the policy objective of maintaining only the required buffer. This concern is further heightened by the combined cost-recovery surplus of more than $400 million identified under volume I. The Group considers it essential to understand how this level of resource accumulation has occurred and whether it reflects inefficiencies or structural imbalances.

12. To conclude, Madam Chair, the Group of 77 and China assures you of our readiness to engage constructively during the informal consultations to conclude this agenda item in a timely manner.

I thank you.