Mr Chair,

1. I have the honor to speak on behalf of the Group of 77 and China on agenda item 135: Financial reports and audited financial statements, and reports of the Board of Auditors.

2. At the Outset, the Group of 77 and China would like to thank the representatives of the Board of Auditors, including the Chair of the Audit Operations Committee, for introducing the reports of the Board of Auditors for the financial year ended 31 December 2021. The Group also wishes to thank the representatives of the Secretariat and Chair of the Advisory Committee on Administrative and Budgetary Questions for introducing the respective reports related to this agenda item.

Mr. Chair,

3. Let me begin by expressing the Group's long-standing recognition and appreciation of the role the Board of Auditors plays in this Organization. Its work as an external audit and oversight body of the United Nations is an essential tool for the functioning of the oversight system. We attaches great importance and value to the work of the Board of Auditors in providing the necessary oversight on financial matters of the United Nations.

4. The Group of 77 and China expresses appreciation for the high quality of the Board's reports and its recommendations. We also welcome the submission of the audited financial statements for the year ended 31 December 2021. The Board's reports are a key element in helping the membership to keep track of the Organization's expenditures and the efficient fulfillment of its mandates.
 
5. The Group notes that 15 entities had closed the financial year with a surplus, and that 2 had recorded a deficit, when those numbers were respectively 12 and 5. Despite some deficits, the Board had assessed that, in general, the financial position of all entities remained at least sufficient, the he solvency ratios and liquidity ratios were comfortably high for most of the entities.

6. The Group is pleased to note that all entities have received unqualified audit opinions from the Board of Auditors. We call upon all these entities to address the identified weaknesses while preserving the current accomplishments.

Mr. Chair,

7. The Group has taken note with serious concern UNOPS again received an emphasis of matter related to its Sustainable Infrastructure Impact Investments (S3i) initiative. We look forward to receiving more information of the internal controls, risk management and governance structures of UNOPS.

8. The Group is concerned over a number of issues raised by the board in its reports related to financial and budgetary matters, including cost recovery, transfer of resources from the regular budget fund to the cost-recovery fund, deficiencies in the creation of fund commitments, etc. We emphasize that budget management is a key issue to the operating of the UN, and request the Secretariat to make further efforts to improve the financial and budget management.

9. The Group notes with concern that, as at 31 December 2021, 21 of 130 (16 per cent) resident coordinator positions were vacant. Twenty (95 per cent) of those vacant positions were encumbered by resident coordinators ad interim. In this regard, the Group reiterates its call for the strengthening of the development pillar, and the utmost importance of improving the geographical representation.

10. The Group takes note with serious concern of the compliance issues disclosed in the Board's reports, which were not in full compliance with the United Nations legal framework including the Charter of the United Nations and the Financial Regulations and Rules of the United Nations. The Group reiterates any activity of the administrations should be subject to the Organization's legal framework

Mr. Chair,

11. The Group has thoroughly examined this year's report, and noted that the overall rate of implementation of the recommendations of the previous year had increased from 41 per cent in 2019, 48 per cent in 2020, to 53 per cent in 2021. But it still has room for improvement compared to the 65 per cent rate realized in the biennium 2008-2009, especially for the entities whose implementation rate was below 50 per cent.

12 The Group underscores the need for all entities to take appropriate measures to ensure that the recommendations of the Board of Auditors are implemented, as a matter of priority and in a timely manner, and that there are proper accountability arrangements for delays in implementations. Furthermore, reiterates its request to the secretariat to enhance its efforts to effectively implement in full the endorsed recommendations of the Board in a timely manner and to provide a full explanation for the delays in the in the implementation of all outstanding recommendations.

13. In conclusion, the Group would like to assure you of its readiness to engage constructively with all relevant stakeholders to conclude this agenda item at the earliest opportunity.

I thank you, Mr. Chair.