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Revised Estimate of the Shortfall in U.S. Contributions to the United Nations

Published by the Government Accountability Office on 1999-10-08.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

   G A O
. AGAO Accountability *Integrity * Reliability

United States General Accounting Office                                                   National Security and
Washington, DC 20548                                                               International Affairs Division



            B-283835

            October 8, 1999
            The Honorable Benjamin Gilman
            Chairman, Committee on International Relations
            House of Representatives
            Subject: Revised Estimate of the Shortfall in U.S. Contributions to the United Nations
            Dear Mr. Chairman:
            For several years the United States has been in arrears in the payment of its assessed
            contributions for the U.N. regular budget, international tribunals' and peacekeeping
            operations. Assessed contributions-which are levied on U.N. members to fund the
            organization's activities-are considered to be in arrears if unpaid by December 31 of
            the year they are due. Article 19 of the U.N. Charter states that a member loses its
            right to vote in the U.N. General Assembly if the amount of its arrears equals or
            exceeds the amount of its assessed contributions for the preceding 2 years.
            You were concerned that the United States could lose its right to vote on January 1,
            2000, unless it reduced its arrears before the end of 1999. In July, we estimated that
            the United States would need to pay about $153 million in addition to anticipated
            payments of $508 million before the end of 1999 to reduce its arrears sufficiently to
            avoid losing its right to vote on January 1,20003 As you requested, we updated our
            estimate of the U.S. contribution shortfall on January 1, 2000, by analyzing changes in
            the amounts of anticipated and actual U.N. assessments and U.S. payments since July
            1999. We verified our analysis by discussing it with Department of State officials. We
            conducted our review from September through October 1999 in accordance with
            generally accepted government auditing standards.
            RESULTS IN BRIEF

            On the basis of actual and anticipated U.N. assessments and U.S. payments as of
            September 30, 1999, we estimate that the United States will need to pay about $111
            million in addition to anticipated payments of $548 million before the end of 1999 to


            'The United Nations has established international criminal tribunals for the former Yugoslavia and
            Rwanda to investigate and prosecute persons responsible for genocide and other serious violations of
            international humanitarian law committed in those regions.
            'A member's loss of its right to vote in the General Assembly does not affect its right to vote in the
            U.N. Security Council or in several U.N. specialized agencies.
            3See United Nations: Status of U.S. Contributions and Arrears (GAO/NSIAD-99-187, July 28, 1999).


                                                      GAO/NSIAD-0041R Revised Estimate of U.S. Contributions Shortfall
 B-283835

reduce its arrears sufficiently to avoid losing its right to vote in the U.N. General
Assembly on January 1, 2000. This estimate of the U.S. contribution shortfall is $42
million less than our July 1999 estimate. The reduction in our estimate reflects a net
increase of $40 million in anticipated and actual U.S. payments for U.N. peacekeeping
and $2 million in anticipated credits from the United Nations for unspent U.S.
payments for U.N. peacekeeping in prior years!' Changes in anticipated U.S.
payments or U.N. credits before the end of 1999 would affect our estimate of the
shortfall. A table showing the calculation of our estimate of the U.S. contribution
shortfall and the changes from our July 1999 estimate is enclosed.
AGENCY COMMENTS
We provided a draft of this letter to the Department of State's Bureau of International
Organization Affairs. Officials from the Bureau concurred with our updated estimate
of the additional payment the United States needs to make before the end of 1999 to
avoid losing its right to vote in the U.N. General Assembly on January 1, 2000, and our
analysis of the factors responsible for the change in our estimate since July 1999.
State officials also provided several technical comments on this letter, which we
incorporated as appropriate.


We are providing copies of this letter to other congressional committees; the
Honorable Madeleine Albright, Secretary of State; the Honorable Robert Holbrooke,
Permanent U.S. Representative to the United Nations; the Honorable Jacob Lew,
Director, Office of Management and Budget; and the Honorable Kofi Annan,
Secretary General of the United Nations. Copies will be made available to others
upon request.
Please contact me at (202) 512-4128 if you or your staff have any questions about this
letter. Key contributors were Tetsuo Miyabara and Michael Rohrback.
Sincerely yours,



Harold J. Johnson
Associate Director
International Relations and Trade Issues

Enclosure




"The United Nations refers to these credits as "unencumbered balances."


Page 2                               GAO/NSIAD-00-41R Revised Estimate of U.S. Contributions Shortfall
ENCLOSURE                                                                                                          ENCLOSURE


REVISED ESTIMATE OF THE U.S. CONTRIBUTION SHORTFALL
ON JANUARY 1, 2000 (AS OF SEPTEMBER 30, 1999)

Dollars in millions
                                                  July 1999 estimate             September 1999            Change from July
                                                                                       estimate               1999 estimate
                                                   Subtotal       Total        Subtotal       Total       Subtotal         Total
U.S. assessed contributions due                                  $1,963                      $1,979                         $16
through 1999 (estimated)
     Arrears (outstanding contributions               $1,294                     $1,294                            0
     for 1998 and prior periods)
     1999 assessed contributions                         669                         685                       $16a
     (estimated)
    Less estimated payments during                                   508                         548                          40
    1999
     Fiscal year 2000 appropriations                     204                         206                          2°
     (estimated)
  Fiscal year 1999 appropriations                        301                         339                         38c
  (estimated)
  Fiscal year 1998 appropriations                           3                           3                          0
 Less U.N. credits (estimated)                                       20                           22                           2
Subtotal (projected arrears balance                              $1,435                       $1,409                        -$26
on Jan. 1, 2000)



Les                       _        r r




Estimated contributions shortfall                                  $153                         $111                        -$42
on January 1, 2000


Note: Table reflects actual and anticipated U.N. assessments and U.S. payments as of September 30, 1999.

a Change reflects the net of (1) increased assessments of about $84 million for the U.N. peacekeeping operation authorized by
  the U.N. Security Council in Kosovo and (2) decreased assessments for several U.N. operations, such as those in Angola
  and Sierra Leone. Assessments for 1999 for the U.N. regular budget ($304 million) and international criminal tribunals ($45
  million) have not changed since July 1999.
bChange reflects anticipated payment of about $2 million for the U.N. peacekeeping operation in Tajikistan. State continues to
 anticipate payment of $204 million from fiscal year 2000 funds for the U.N. regular budget assessment for calendar year
 1999. The United States has paid its calendar year assessments for the U.N. regular budget with funds appropriated for the
 following fiscal year since 1983.
C   Change reflects the net of (1) increased U.S. payments of about $31.3 million for the U.N. operation in Kosovo and an
    anticipated payment of $35.4 million for the same operation and (2) a decrease of $29 million in U.S. payments for several
    U.N. peacekeeping operations, such as those in Angola, Sierra Leone, and Western Sahara. Actual and anticipated
    payments from fiscal year 1999 funds for the U.N. regular budget ($100 million) and international criminal tribunals ($41
    million) have not changed since July 1999.
    U.S. payments for Kosovo (which total about $67 million) reflect congressional approval of the Department of State's August
    1999 reprogramming request. This payment is less than U.N. assessments for this operation (see note a) because Section
    404(b)(2) of the Foreign Relations Authorization Act of 1994-95 (PL 103-236) caps U.S. payments after fiscal year 1995 at 25
    percent of the total of all assessed contributions for a U.N. peacekeeping operation. The United Nations, however, continues


Page 3                                                             GAO/NSIAD-00-41R Revised Estimate of U.S. Contributions Shortfall
ENCLOSURE                                                                                                      ENCLOSURE


 to assess the United States at a higher rate (currently about 30.4 percent) because the U.N. General Assembly has not
 changed the U.N. methodology for calculating U.S. and other members' peacekeeping assessment rates.
 The $29 million decrease in U.S. payments for several peacekeeping operations reflects several changes since July 1999.
 For some operations, such as in Sierra Leone, U.S. payments declined because actual assessments were less than
 anticipated. For other operations, such as in the Western Sahara, the United States decided not to pay some assessments
 for policy reasons.
dChange  reflects increased U.N. credits to the Urited States for unspent amounts from prior years for U.N. peacekeeping
 operations-such as in Bosnia, where staff costs were lower than budgeted.
Source: GAO analysis of U.N and Department of State financial data.


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