Amid Record UN Cash-Flow Challenges, Budget Committee Begins Resumed Session with Calls to Modernize Financial Regulations, Human Resource Policies for Greater Efficiency

Amid Record UN Cash-Flow Challenges, Budget Committee Begins Resumed Session with Calls to Modernize Financial Regulations, Human Resource Policies for Greater Efficiency

The General Assembly's Fifth Committee (Administrative and Budgetary) opened its first resumed session today to consider key matters under its purview, including issues related to the Organization's liquidity crisis, the geographical diversity of staff, air travel, staff contract types, supply chain management, and modernization of technology infrastructure.

At the outset, delegates approved the list of items (document A/C.5/80/L.23) to be discussed over the next five weeks.

The Committee formally operates within the single annual session of the Assembly, with its work divided into three main segments: an October-December main session, a first resumed session in March, and a second resumed session in May.

The current session, to run through 27 March, takes place amid the ongoing UN80 reform initiative and follows the adoption of the 2026 regular programme budget in December, which drastically reduced the number of staff posts and financial resources.

One of the key issues to be discussed is the legislative directives governing how the UN's finances are managed, with a meeting tentatively scheduled for 12 March to review the Secretary General's report on proposed revisions to the Financial Regulations of the United Nations (document A/80/367).

Record $1.57 Billion Owed to UN Regular Budget

The Organization faces severe cash-flow challenges when mandatory contributions are not paid on time or in full. By the end of 2025, a record $1.57 billion remained outstanding for the UN's regular budget. In a letter to Member States earlier this year, the Secretary-General warned that the Organization could run out of cash by July.

The situation is further complicated by credit returns arising from underspending due to contributions received too late to be fully used, or funds never received. Under the Organization's Financial Regulations, any unspent portion of the budget - whether due to late or non-payment - must be returned to Member States as credits against future assessments. As a result, the United Nations cannot retain surplus funds to offset future cash shortfalls and may enter the subsequent financial periods with reduced liquidity.

Calls to Modernize UN's Financial Regulations, Address Root Cause of Liquidity Crisis

The United Nations is facing "a moment of truth with unpaid contributions and an obligation to return funds that were never received in the first place", said the representative of Australia as she also spoke for Canada and New Zealand. This, she warned, accelerates "a downward liquidity spiral". She asked the Secretariat to provide information on options to improve the UN's financial footing, including updating the methodology for the determination of credit returns based on actual revenues. These delegations also look forward to engaging on the Secretary-General's proposals to amend the financial regulations and make further improvements to modernize the rules.

However, "the root cause of the liquidity crisis is the substantial arrears of the largest contributor", said the representative of China. "Suspending or stopping the return of credit to Member States does not resolve the underlining issue," he pointed out. The Secretariat should address both "symptoms and root causes".

His counterpart from the Russian Federation voiced regret that the UN is continuing to experience difficulties caused by cash shortages, including the risk of undermining the work of intergovernmental bodies. "Austerity measures should not have an impact on the ability of intergovernmental bodies to carry out their roles fully or serve to restrict their work," he said. Any responses to the situation should be balanced and transparent, and most importantly, should be discussed upstream with Member States, he stressed.

Straightforward Expectations: Discipline, Accountability, Forward-Looking Human Resources Policies

"The United States approaches this first resumed session with straightforward expectations," said the country's representative, citing the need to "deliver decisions that restore discipline, strengthen accountability and protect the resources that Member States entrust to the United Nations". He supported technical updates to the Financial Regulations, as well as consideration of the current credit return methodology.

He also stressed the need to examine the contractual modalities for staff, noting the benefits of fixed-term appointments over open-ended continuing contracts.

Staff are the Organization's most valuable asset, noted the representative of the European Union, in its capacity as observer. "This is precisely why a comprehensive and forward-looking human resources strategy is essential - particularly in challenging times, when downsizing and workforce adjustments are high on our UN80 agenda," she said. The regional bloc remains a strong supporter of modern, equitable, and effective human resources policies, including for young professionals, she added. Mexico's delegate said improving the administration and management of human resources help achieve "the highest possible degree of mandate delivery".

Geographically Diverse Workforce Key for Strong International Civil Service

Japan, its delegate said, looks forward to examining the Secretary-General's ongoing efforts regarding human resource management, including enhancing workforce rejuvenation and promoting its equitable geographical diversity "by closing the gap between the desirable range and actual staff number for unrepresented and underrepresented countries" in the Secretariat.

On a similar note, Israel's representative said that "a workplace that is inclusive and equitable is stronger, more effective and more representative of the global community it serves". Agreeing, the speaker for Rwanda underscored the importance of ensuring a Secretariat that is representative, inclusive and fit for purpose. "Equitable geographical representation at all levels, transparent recruitment processes and performance management framework that rewards merit and accountability are not aspirations," he said, adding: "They are essential for a strong and international civil service."

The representative of Uruguay, speaking on behalf of the "Group of 77" developing countries and China, recognized the extraordinary effort undertaken by Member States in the context of the UN80 initiative's workstream 1, including the approval of significant reductions to the budget.

Implementing UN80 Initiative Requires Transparent, Evidence-Based Follow-Up

Such decisions, however, must be accompanied by a transparent and evidence-based follow-up that enables the Assembly to assess both the financial and administrative implications of implementation, he said, requesting that Member States be provided with structured and comparable information to support effective oversight.

The United Kingdom was among those raising alarm over the cost of staff's air travel. "The current policy on business-class travel is unsustainable," she said, adding: "In times of financial constraint, reform is necessary to ensure more appropriate air travel rules." Although the travel budget was cut to restrict the use of business class, reforming the rules in their totality is necessary to provide clarity to staff and permanent reform. Recalling that consensus on this item was close, she expressed hope for a successful conclusion.

Improving Operational Efficiency through Responsible Use of Artificial Intelligence

The representative of the Dominican Republic recognized the important roles the information and communications technology strategy and the Umoja system play in modernizing administrative and data-driven decision-making processes. However, she underscored the need to strengthen the clarity of the governance framework, budgetary transparency and accountability to Member States. Her counterpart from the Republic of Korea added that artificial intelligence (AI) represents a catalytic tool for improving operational efficiency. AI can streamline administrative processes, enhance data analytics and strengthen evidence-based decision-making processes when used responsibly. Timely establishment and implementation of a coherent governance framework is essential to ensuring the responsible use of AI in the UN, he emphasized.

Maintaining Strong UN Development Pillar to Support Countries in Special Situations

When considering the liquidity constraint, the needs of countries in special situations, including small island developing States, must be fully recognized, said the representative of Fiji, calling for continued strong support to the development pillar of the UN, including the full implementation of the Antigua and Barbuda Agenda for small island developing States.

The speaker for Maldives said any reform should not result in the administrative burdens being transferred from the Secretariat to delegations, an impact felt most sharply by small missions.

The Committee is scheduled to discuss revised estimates for Special Political Missions on 16 March. The representative of the European Union said that this will require "our careful and thorough scrutiny".

Other Topics: Cost Recovery in UN Secretariat, Development of Umoja, Information and Communications Technology Strategy, Joint Inspection Unit Report

Following opening statements on the work programme for the session, delegates began discussing and heard the introduction of reports by the Secretary-General and the Advisory Committee on Administrative and Budgetary Questions (ACABQ) on several topics: cost recovery in the UN Secretariat (documents A/80/396 and A/80/475); progress on the functioning and development of the Umoja/Enterprise Resource Planning system (documents A/80/417 and A/80/7/Add.26); the status of implementing the UN's information and communications technology strategy (documents A/80/558 and A/80/626); and the Joint Inspection Unit's 2025 report (documents A/80/34 and A/80/608).

Complete Live Blog coverage of today's meeting can be found here.