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Group session 3-One Office, transaction costs

Group session 3-One Office, transaction costs. Chaired by Tanzania. Group 3-Preambule. UN reforms not just about cost saving but about results ONE office is one of the most important component.

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Group session 3-One Office, transaction costs

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  1. Group session 3-One Office, transaction costs Chaired by Tanzania

  2. Group 3-Preambule • UN reforms not just about cost saving but about results • ONE office is one of the most important component. • UN system to make speedy progress to achieve on this component-still bureaucracy and UN still resisting • Transaction costs can be diminished by using national systems and expertise (this can build capacity)

  3. Group 3-Country experiences • Albania: common banking, travel, security • cont: Use of other agencies systems • ONE single report (no separate reports-specific reporting ) • Assessment of procurement systems done jointly (with other donors)-increase use of national financial systems • In 2 years, 120 UN staff under one roof-investments to be made • One house a key feature, an important aspect. • The vision of Vietnam: 16 agencies, rather organised in theme groups

  4. Group 3-One office • Expectation on cost savings (500,000 USD per year-on energy savings and transport) • Government and UN contribution • Vietnam PM endorsed the dev of 1 UN house, renovations expected-10 year rent free • Strong commitment of donors • Cost of the UN house additional funding • Procedures could be accelerated. By May 2010, a model of the house to be available-depending on HQ procurement procedures

  5. Group 3 • An agreement to be signed has lengthy legal implications (obstacles from HQ slowing the process) • Government and UNCT: single agreement • MOZ: common premises (Government has provided land)-different modalities (land, resources etc) • What are the funding options? • Cverde: 4 agencies implementing DaO. The % of savings was 36% (no agreement yet on the allocation)

  6. Group 3 • TZ: the most ambitious but a number of steps to be achieved • Need to be addressed comprehensively (analysis). Define transactions costs is also difficult (not just monetary equivalent) • TZ: 900,000 USD as from next year saved • Incentives to be designed (a challenge) • Same applies for ICT plateforms (save $ ) • Human resources , expertise the most challenging area of reform (HQ has to be flexible: skill mix needed)

  7. Group 3 • TZ: finances. Our financial systems increase costs (i.e FACE forms differ within Excom agencies) • Reporting is the major impediment to the reform (more reporting to HQ as pilots) • How to finance the UN house? Need of a strong business case-then cost-benefit analysis (in 4 years return to investment)

  8. Group 3 • Comoros: the UN house-challenge is a reconfiguration of support services, and putting clusters together • Where do we get the extra funding? Readjustment to be made. • Transaction costs: likely to rise the first year? Any studies and evidence? What about the global level?

  9. Group 3 • Single procurement: possibilities to reduce transaction costs • Commitment from agencies is key to harmonize procedures-this will take time • Overstating the importance of transaction costs saving-issue of funding is the main issue! • Transaction costs goes beyond just money savings

  10. Group 3 • MOZ to launch the common ICT y infrastructure: costs to be reduced, connectivity to be improved. Why did it take long? HQ cacophony (back and forth legal procedures) • The rationalization of business practices by using national systems. Definition if costs not clear for instance • Cost savings-context of funding modalities of agencies different from programs and operations

  11. Group 3- • Efficiency gains-challenge depending on the agency funding mechanisms (what are the cost by agency?) • Measures to be put in place, more on the operations front • Little guidance on what we are trying to save (obviously time and money for partners). Need to move on and list them (codifying)

  12. RECOMMENDATIONS • 1. Conceptually Clarify and define measurement of transaction costs for UN and categorize cost centers • 2. Adopt a single reporting format and discontinue agency specific format • 3. Possibility of granting DaO pilots incentives (reward system and performance criteria could be applied) • 4. Use of national systems may be a source of cost saving-however it may not have the desired impact if not using national for real (fiscal cycle, national reporting and treasury) • 5. More to be done on efficient HR (harmonization, flexibility of organigrams and interagency transfers)

  13. RECOMMENDATIONS • ONE UN house: donors are encouraged to provide additional funding when business case is made and security is taken care of. This depends on the local context

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