International Affairs:

Status of Reforms and Budgets of the United Nations Educational, Scientific, and Cultural Organization

GAO-03-565R: Published: Mar 28, 2003. Publicly Released: Mar 28, 2003.

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In 1945, the United States helped establish the United Nations Educational, Scientific, and Cultural Organization (UNESCO) as a means to promote international peace. During the 1970s, UNESCO was criticized for becoming too politicized. In 1984, the United States left the organization, contending that it was poorly managed and had failed to restrain budget growth. At that time, the United States urged UNESCO to reform its management practices and adopt zero real growth budgets. In 2002, the United States announced that UNESCO had made progress in adopting reforms and that the United States would rejoin UNESCO to help advance the organization's mission. The United States plans to rejoin UNESCO on October 1, 2003. To facilitate oversight of U.S. reentry into UNESCO, the House committee on International Relations asked us to review the organization's reform efforts and budget trends, as well as issues associated with the U.S. reentry.

While UNESCO has launched several efforts to reform its management practices, these reforms are in their early phases and will succeed only with the sustained efforts of UNESCO's Director General and member states. In the late 1990s, UNESCO's auditors and top officials identified numerous management problems, including violations of personnel and hiring rules, and widespread weaknesses in financial rules and procedures. Other problems included an insufficient focus on program results, an over-extended network of field offices, and fragmented internal oversight functions. In response, UNESCO began efforts to enforce and strengthen its personnel rules, create new automated financial and program management systems, close unnecessary field offices, and establish an integrated internal oversight and evaluation office. While the Director General has made reform a high priority, these efforts are not yet complete. According to UNESCO, the organization plans to implement a new personnel appraisal system, train staff on new financial systems, develop measures for evaluating program results, provide field staff with access to the new systems, and close additional field offices. Over the past 6 years, UNESCO's biennial regular budget has remained at its current level of $544 million. When adjusted for inflation, UNESCO's 2000-2001 regular budget is almost equivalent to its 1984-1985 budget. However, UNESCO's total resources grew significantly during this period due to an eight-fold increase in UNESCO's extra-budgetary funds. Extra-budgetary funds constituted about one half of the resources UNESCO had available for its 2000-2001 programs. While the infusion of extra-budgetary funds has allowed UNESCO to fund more projects, representatives of some member states that we interviewed stated that extra-budgetary resources may not support the priorities set by the General Conference. The United States faces several unresolved issues before it rejoins UNESCO in October 2003. First, the United States must decide which UNESCO budget proposal it will support for the 2004-2005 biennium. The Director General is considering two proposals that will breach the zero nominal growth budget of $544 million and increase UNESCO's budget to as high as $610 million. The executive branch's fiscal year 2004 budget request for UNESCO assumes that the UNESCO budget will remain at $544 million. At this level, the U.S. contribution of $60 million will essentially decrease the assessments of other member states by an equivalent amount. Second, since the United States has announced that it will stand for election to UNESCO's executive board, it will need to campaign for support from other member states. Membership on the Executive Board would allow the United States to contribute to the reform efforts. Third, the United States will have to determine if it wants to target its assessment for the last quarter of 2003 to support U.S. priorities. UNESCO officials stated that they would support the establishment of a special account for the initial U.S. payment of $15 million, subject to the approval of the Executive Board and the General Conference. Without a special account, the $15 million could be refunded to other member states. Fourth, until an ambassador to UNESCO is appointed, the United States must decide how best to convey U.S. interests and priorities. The current observer to UNESCO does not have the authority of an ambassador to help shape and convey U.S. priorities.

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