JIU/REP/2018/5 OPPORTUNITIES TO IMPROVE EFFICIENCY AND EFFECTIVENESS IN ADMINISTRATIVE SUPPORT SERVICES BY ENHANCING INTER-AGENCY COOPERATION Prepared by Jeremiah Kramer Joint Inspection Unit Geneva 2018 United Nations JIU/REP/2018/5 Original: ENGLISH OPPORTUNITIES TO IMPROVE EFFICIENCY AND EFFECTIVENESS IN ADMINISTRATIVE SUPPORT SERVICES BY ENHANCING INTER-AGENCY COOPERATION Prepared by Jeremiah Kramer Joint Inspection Unit United Nations, Geneva 2018 iii EXECUTIVE SUMMARY Opportunities to improve efficiency and effectiveness in administrative support services by enhancing inter-agency cooperation JIU/REP/2018/5 The policy context for this review includes: the direction given repeatedly by the General Assembly, especially in its two most recent resolutions on the quadrennial comprehensive policy review, 67/226 and 71/243, in pursuit of more cost-efficient support services, by reducing the duplication of functions and administrative and transaction costs through the consolidation of support services at the country level; and the requirement for integrated support across the United Nations system for the 2030 Agenda for Sustainable Development. Having examined, in 2016, the predominantly internal measures taken by United Nations system organizations to improve their administrative efficiency through the development of multifunctional shared services centres in low cost locations, the Joint Inspection Unit (JIU) undertook to examine the opportunities for efficiency gains by United Nations system organizations in working together. The setting in which this report is presented has evolved significantly since its inception. The Secretary- General has made far-reaching proposals for the repositioning of the United Nations development system in support of the 2030 Agenda, the General Assembly has welcomed the measures envisaged, including a common back office and an ambitious common premises target. Within the framework of the United Nations Sustainable Development Group, the Business Innovations Group1 has been tasked with moving this agenda forward. The premise underpinning this review is that inter-agency cooperation needs to be purposeful. Cooperation, collaboration and joint action need to be considered in terms of demonstrable contributions to the efficient and effective implementation of programmatic mandates. Although the transaction costs of collaborative work are rarely calculated, they are relevant in deciding what to collaborate on and what form collaborative action should take. Gaining administrative efficiency through inter-agency cooperation has been a preoccupation for decades. In 1977, the General Assembly spoke of the need for maximum uniformity of administrative arrangements in the operational activities for development, including the establishment of a common procurement system and a unified personnel system and a common recruitment and training system.2 Since at least the forty-second session of the General Assembly, successive triennial and quadrennial policy reviews of operational activities for development have called for variants of this. The “Delivering as One” initiative drew heightened attention and stimulated deeper efforts, lessons from which inform this report. The ambitious and comprehensive vision set out in resolutions 67/226 and 71/243 included measures within organizations to strengthen internal efficiency, common services in all administrative areas and at all levels by 2016 based on unified regulations, rules, policies and procedures, and country-level consolidation of support services. The present review seeks to: Clarify what organizations consider is required by the 2030 Agenda in terms of more common and integrated administrative support service delivery; Estimate the scale of resources devoted to the delivery of administrative support services in general and at the country level; 1 The Working Group on Business Operations supports country offices and management teams to promote harmonized business operations at the country level, which include areas of strategic planning, monitoring and evaluation, procurement, information and communications technology, human resources and logistics. 2 See General Assembly resolution 32/197, annex, para. 32. GE.18-16784(E) iv Draw lessons that should inform future arrangements from current inter-agency administrative support cooperation at the country level, with particular focus on business operations strategies and the country-level integrated service centres; Assess the interplay between administrative support service arrangements at the country level and the global and regional levels; Assess opportunities to leverage established mandates and capacities in the United Nations system for administrative support delivery; Assess the opportunities offered by mutual recognition of each other’s policies and procedures as a strategy for achieving efficiency; Examine governance, leadership and transparency requirements to drive efficient administrative support service delivery. Main findings and conclusions I. The complexity of the challenge of advancing common business operations should not be understated It will not be easy to make a major leap in advancing common business operations. Achievement of this objective will depend heavily on an evidence base to demonstrate the benefits, sustained leadership for a long-term process and a willingness by organizations to yield some control. The complexity inherent in the different mix of large and small and resident and non-resident entities with varying degrees of internal capacity is compounded by operational requirements that vary significantly. Some organizations are heavily knowledge-based and oriented towards capacity-building, while others apply a humanitarian lens with specific operational requirements, timeliness and major supply chain dimensions, to which may be overlaid mandates concerning specific populations of concern. Different country contexts, especially humanitarian operations, have an important bearing on how organizations are required to operate. Differences among organizations in governance, stakeholders, electronic systems, rules and procedures, operational tempo and organizational culture form part of the complexity mix. II. Inter-agency cooperation offers a significant efficiency opportunity At this stage, it is simply not possible to know with accuracy what savings could be derived through more efficient business operations based on inter-agency cooperation. Three limitations stand out: the absence of comprehensive and comparable data among organizations on the resources devoted to these functions; the lack of baseline information on current levels of business operations efficiency; and the lack of clarity on whether there are operational requirements that may not be sufficiently met in a common service structure. However, analysis of the data available demonstrates that the financial and human resources devoted to these functions are substantial and that the opportunity for efficiency gains is significant — worth the trouble to analyse and harvest. It would be a mistake to view the opportunities for efficiency gains solely through the prism of anticipated financial savings. In a recent JIU report on service centres in the United Nations system, the Inspector found that organizations also sought improved service quality, specialization, better risk management and enhancement of mission focus.3 The Secretary-General’s concept of common business operations also emphasizes enhanced quality of services, enabling a sharper focus on mandates and programmatic functions.4 The current opportunity needs to be understood to include operationalizing such qualitative objectives. It is integral to the redesign of business operations based on common inter-agency arrangements because it justifies participation. A consistent finding in interviews for this review is that organizations are most willing to collaborate if the product is better. In virtually no instance was “cheaper” the only component of “better”. These objectives need to be supported by objective performance measurement and transparent reporting. 3 JIU/REP/2016/11. 4 See A/72/684-E/2018/7, para. 46. v In terms of resources, approximately $4.3 billion (13.4 per cent of total expenditure) and 30,698 personnel (20.2 per cent of all personnel) are devoted to administrative support functions. Just under half of the spending and almost two thirds of the related staff are at country level. The Office of the United Nations High Commissioner for Refugees (UNHCR), the United Nations Children’s Fund (UNICEF), the United Nations Development Programme (UNDP), the United Nations Population Fund (UNFPA) and the World Food Programme (WFP) together account for 79 per cent of the country-level spending and 74 per cent of the personnel. Using three different methods to estimate possible efficiency gains indicates a range of between 15 and 25 per cent, or between $300 and 500 million. This is a range, not a forecast. There are too many variables at play to draw a straight line between an estimation of a range of opportunity and a harvestable result. While efficiency gains can be significant, their realization will require sustained effort, time and investment, many might be one-off, not cashable or transferable to other activities. The review also finds there is significant scope for delivering a wide range of functions through shared services, and that a range of functions delivered locally are not location dependent and could be provided at a global