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UNITED
NATIONS
A

        General Assembly
A/56/13/Add.1
2 October 2001

General Assembly
Official Records
Fifty-sixth Session
Supplement No. 13 (A/56/13)


Report of the Commissioner-General of the United Nations Relief and

Works Agency for Palestine Refugees in the Near East

Addendum

Programme budget 2002-2003


Contents

Chapter
Page
I. Introduction to the 2002-2003 biennium budget
2
II. Education programme
27
III. Health programme
34
IV. Relief and social services programme
43
V. Microfinance and microenterprise programme
50
VI. Operational and technical services
54
VII. Common services
59



Chapter I
Introduction to the 2002-2003 biennium budget

Overview

1.1 The United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) was established by the General Assembly in its resolution 302 (IV) of 8 December 1949 as a separate entity within the United Nations system. The Agency’s mandate has been renewed repeatedly, most recently by the General Assembly in its resolution 53/46 of 3 December 1998, when it was extended until June 2002.

1.2 UNRWA reports directly to the General Assembly. Overall review of UNRWA programmes and activities is undertaken by the 10 member Advisory Commission, which includes representatives of the Agency’s major donors and host Governments. The Advisory Commission maintains a working relationship with all host Governments and with the Palestine Liberation Organization.

1.3 UNRWA has continuously adapted its role and services in keeping with the needs of the refugees and the changing environment in which it operates. In its long history in the area, the Agency has demonstrated a capacity to adapt and enhance its programmes as required to cope with developments in the region, and it stands ready to continue to do so in accordance with the mandate it receives from the General Assembly.

1.4 A number of scenarios for the work of UNRWA have arisen owing to the current situation in the Middle East. Should unrest continue, security issues, deteriorating economic conditions for the refugees and the restrictions on the flow of goods, services and individuals will affect the work of UNRWA. Should the peace talks resume and lead to a settlement, the Agency may be asked to assume new tasks.

Strategic goals

1.5 The Agency’s goal is to promote the well-being of the Palestine refugees and strengthen the self-reliance of the refugee community. The long-term viability of its programmes and sustainability are key themes of its activities. Where feasible and desirable, UNRWA will continue to incorporate cost-sharing and self-support measures into its regular programmes to ensure the efficient use of resources and to support participation by the beneficiary population in the provision of Agency services.

1.6 The overall strategy of UNRWA for the biennium 2002-2003 is to continue to provide basic education, health, and relief and social services to more than 4 million registered Palestine refugees living in Jordan, Lebanon, the Syrian Arab Republic and in the West Bank and the Gaza Strip. It will also continue to support the microfinance and microenterprise programme in the Gaza Strip and West Bank and will aim to expand this programme to other fields.

1.7 The ability of the Agency to provide its services is entirely dependent on sufficient voluntary contributions being made available annually. The budget therefore aims to overcome the funding shortfalls of recent years. While shortfalls have been a feature of the financial situation of UNRWA since 1950, since 1993 the gap between budgeted and actual expenditure has reached as much as $50 to $70 million per year. This gap has undermined the usefulness of the budget as an indicator of future expenditure and the Agency’s financial requirements. The 2002-2003 budget has been formulated on the basis of a more comprehensive view of funding, actual utilization in previous years and realistic assessment of needs.

1.8 The budget reflects the financial requirements which will allow UNRWA to operate on a sustainable and cost-effective basis, without recourse to austerity or other ad hoc cost reduction measures, and to safeguard the quality and level of services provided for Palestine refugees. The last few years have witnessed growing concern among the refugee community and in the region generally over the decline in UNRWA services. The Agency believes that the current minimal level of service provision must be maintained, with future efforts focused on improvements in quality and efficiency.

Budget format

1.9 The 2002-2003 budget provides the Agency with a renewed opportunity to document the way in which it intends to allocate its resources for the biennium in order to achieve the programme, operational and management objectives it has set for itself. UNRWA has taken this opportunity to build on the progressive features of its last biennium budget. The Agency has integrated the programmatic aspects of the budget with the resource narrative by employing a consistent results-based budgeting approach linking clearly defined programme activities to programme objectives and expected results, with assessment of the latter provided for by key performance indicators. This approach reinforces the usefulness of the budget as a planning, managerial and fund-raising tool, while at the same time maintaining the Agency’s financial transparency and integrity. Salient features of the budget include:

(a) The budget hinges on a biennial programme of work, which specifies objectives, planned activities, expected results and key performance indicators for all Agency activities;

(b) The budget covers the Agency’s total financial requirements for regular programme activities, including both the regular budget (with its in-kind component) and the project budget;

(c) Coherent programme descriptions and justification for budgeted activities have been provided, and the Agency’s Operational and Technical Services, which were last year combined in one department, and its Common Services offices, have for the first time been rendered in substantial detail;

(d) Biennial figures are provided for the 2002-2003 biennium together with comparative figures for prior bienniums, to facilitate comparisons, and where appropriate, to offer baseline data against which to discern programme and budget trends;

(e) Although UNRWA prepares its budget on a biennial basis, operations are financed on an annual basis. Because the fiscal year rather than the biennium is the most relevant for financial management and fundraising, annual as well as biennial figures are listed throughout the document;

(f) As was the case for the 2000-2001 biennium, budget preparation has been guided by planning and budgeting assumptions.



Table I.1
Summary of 2002-2003 total budget volume

(in thousands of United States dollars)
Regular budget
Project budget
Regular budget
Project budget
Project budget
Cash
In-
kind
Total
Total
Cash
In-
kind
Total
Total
Cash
In-
kind
Total
Total
Education
171 556
699
172 255
25 626
197 881
178 362
704
179 066
27 672
206 738
349 918
1 403
351 321
53 298
404 619
Health
53 195
5 716
58 911
11 007
69 918
54 805
5 857
60 662
15 590
76 252
108 000
11 573
119 573
26 597
146 170
Relief and social services
18 119
15 511
33 630
13 196
46 826
18 539
16 369
34 908
13 267
48 175
36 658
31 880
68 538
26 463
95 001
Microfinance and microenterprise programmea
0
0
0
4 855
4 855
0
0
0
4 690
4 690
0
0
0
9 545
9 545
Operational technical services
19 782
34
19 816
150
19 966
19 585
34
19 619
150
19 769
39 367
68
39 435
300
39 735
Common services

(excl. reserves)

28 606
0
28 606
706
29 312
28 297
0
28 297
0
28 297
56 903
0
56 903
706
57 609
General reserves
13 000
0
13 000
0
13 000
18 000
0
18 000
0
18 000
31 000
0
31 000
0
31 000
Residual effect of current emergency
4 531
0
4 531
0
4 531
3 528
0
3 528
0
3 528
8 059
0
8 059
0
8 059
Total
308 789
21 960
330 749
55 540
386 289
321 116
22 964
344 080
61 369
405 449
629 905
44 924
674 829
116 909
791 738
a Includes $2.5 million each year funded from the programme’s income.


Budget structure

1.10 The structure of the UNRWA budget reflects both the recurrent/non-recurrent nature of activities and the means by which they are funded. The budget document indicates how the Agency expects to fund the budget from the different income sources on which it relies. The budget is broadly divided into two parts:

(a) The regular budget comprises recurrent staff and non-staff costs. It is further divided into cash and in-kind portions. The cash budget is funded through unearmarked cash contributions recorded as income to the General Fund (GF). The in-kind budget represents the value of in-kind donations that the Agency expects to receive based on agreements with donors or past practice (e.g. food aid);

(b) The project budget comprises mainly non-recurrent costs funded by earmarked project contributions. Activities are implemented only if they are specifically funded by donors. Most of the Agency’s capital costs are included here, as are certain other one-time activities and essential expenditure that cannot be met by regular budget allocations.

1.11 The regular budget and the project budget together comprise the total budget volume for 2002-2003. The budget text clarifies which programme activities fall under the General Fund, and which fall under the budget’s project component. As illustrated in chapter VIII, activities supported through the project budget have grown in value in recent years (currently about 15 per cent of the UNRWA budget), reflecting the Agency’s ability to augment its services to needy communities by attracting special interest international humanitarian and development funding.


Table I.2
2002-2003 regular budget by programme and field

(cash and in-kind, in thousands of United States dollars)



Table I.3
Agency-wide expenditures by category

(cash and in-kind, in thousands of United States dollars)

1998-1999
expenditure
2000-2001 appropriation
2002-2003
estimates
StaffInternational staff
26 071
26 536
29 462
Local staff
387 344
413 663
440 292
Subtotal
413 415
440 199
469 754
ServicesTravel
1 452
2 354
2 250
Communication
1 962
1 873
2 477
Transport services
2 087
3 097
2 711
Training
329
857
1 979
Miscellaneous services
10 398
6 877
6 877
Consultancy services
747
1 107
1 203
Hospital services
12 110
11 628
16 469
Subtotal
29 085
27 793
33 966
SuppliesMedical supplies
12 396
15 261
19 309
Transportation supplies
1 290
2 034
2 731
Clothing supplies
385
590
589
Textbooks and library books
4 770
8 321
11 112
Sport supplies
124
252
256
Fresh food
1 106
1 292
1 275
Miscellaneous supplies
5 347
6 566
6 923
Teaching supplies
264
491
484
Basic commodities
30 911
36 919
40 853
Subtotal
56 593
71 726
83 532
Equipment and construction Computer hard/software
1 345
1 509
2 084
Equipment and furniture
2 624
2 048
3 319
Transport equipment
1 120
1 304
2 978
Construction
2 310
451
690
Subtotal
7 399
5 312
9 071
PremisesRental of premises
2 536
2 729
2 655
Utilities
3 291
3 490
3 775
Maintenance
0
7 219
7 821
Subtotal
5 827
13 438
14 251
SubsidiesConstruction subsidies
1 423
1 061
964
Other subsidies
19 291
22 010
23 057
Subtotal
20 714
23 071
24 021
ReservesOperational reserve
0
1 744
1 175
Subtotal
0
1 744
1 175
Total
533 033
583 283
635 770
OtherReserves
28 000
31 000
Residual effect of current emergency
8 059
Subtotal
28 000
39 059
Total regular budget
533 033
611 283
674 829
Total project budget
56 790
124 374
116 909

Negative growth



Table I.4
Significant indicators relating to resource requirements
Indicator
1994-1995
actual
1996-1997
actual
1998-1999
actual
2000-2001
estimated
2002-2003
estimated
Percentage growth
2002-2003
over
2000-2001
Area staff posts
21 168
21 553
22 212
23 300
24 730
6.1
Pupils
421 854
447 268
458 716
477 216
526 999
10.4
Teacher posts
11 810
12 952
13 667
14 633
15 679
7.1
Patient visits
6 474 834
7 198 288
7 163 056
7 240 000
7 710 000
6.5
Special hardship cases
171 950
176 739
191 529
208 850
223 725
7.1
Registered refugees
3 246 044
3 469 109
3 625 592
3 939 267
4 219 841
7.1
Average biennial growth
7.0
Note : Annual average growth rate for 2002-2003 over 2000-2001 is estimated at 3.5 per cent.

1.12 Table I.4 indicates an annual growth of 3.5 per cent in the UNRWA clientele population driving the growth of the Agency’s staff and its financial requirements. At the same time, the annual weighted average rate of inflation in the Agency’s area of operations is calculated at 4 per cent. The combined effect of these two factors warrants a budget growth of 7.5 per cent annually.

1.13 Table I.5 shows that the budget estimates for the biennium 2002-2003 reflect an overall nominal growth of 9.0 per cent (that is 4.5 per cent per annum) over the 2000-2001 budget appropriations. Therefore, in real terms, this budget has a negative growth of 3.0 per cent per annum (7.5 per cent-4.5 per cent).

1.14 Hence, the proposed budget for the biennium 2002-2003 reflects at best the bare minimum funding requirements to sustain essential services at the current level and to cater for additional funding requirements. These additional funding requirements result from the integration of new programmes introduced by the host authorities, such as English and information technology courses, in the General Education Programme, as well as the integration of regular programme activities that had been projectized such as hospitalization costs, into the General Fund. Because of this negative growth, the Agency will, in reality, be striving to maintain its core programme activities at a lower level of resources than would have been justified under a needs-based budget, were the Agency able to expect full funding of its actual requirements.

1.15 The 3.0 per cent negative real budgetary growth, necessitated by the fact that donor support is not commensurate with the actual needs of a growing refugee population, will adversely impact the Agency’s clientele. With the 2002-2003 budget, Agency programmes, already struggling to maintain standards in the face of persistent budget deficits, are at risk of a further decline in the education, health, relief, social and income generation services they provide for 4 million registered refugees. Overcrowding in Agency schools, diminishing levels of curative and preventive medical care, a reduction in essential food assistance for the poorest refugee families, and loss of skilled area staff owing to non-competitive salaries, are some of the clear signs that chronic funding shortfalls are undermining the foundation of UNRWA services. A vivid illustration of this is the drop in the Agency’s expenditure per refugee, from approximately $200 in the 1970s to $70 today.


Table I.5
Summary of requirements by category of expenditure

(in thousands of United States dollars)
Resource growth
Category
1998-1999 expenditures
2000-2001 appropriations
2002-2003 estimates
Amount
Percentage
International staff costs
26 071
26 536
29 462
2 926
11.0
Local staff costs
387 344
413 663
440 292
26 629
6.4
Services
29 085
27 793
33 966
6 173
22.2
Operational reserves
0
1 744
1 175
-569
-32.6
Supplies
56 593
71 726
83 532
11 806
16.5
Equipment and construction
7 399
5 312
9 071
3 759
70.8
Premises
5 827
13 438
14 251
813
6.1
Grants and subsidies
20 714
23 071
24 021
950
4.1
Subtotal
533 033
583 283
635 770
52 487
9.0
Working capital requirements
0
14 000
14 000
0
0.0
Salary increase requirements
0
12 000
15 000
3 000
25.0
Contingency reserve
0
2 000
2 000
0
0.0
Residual effect of current emergency
0
0
8 059
8 059
0.0
Total requirements
533 033
611 283
674 829
63 546
10.4



Figure I.1
Summary of requirements by category of expenditure

(in thousands of United States dollars)

Distribution by expenditure type

Figure I.2
2002-2003 regular budget by category

(cash and in-kind, in thousands of United States dollars)

1.16 Figure I.2 shows the 2002-2003 regular budget broken down into categories of expenditure. Staff costs account for 71.7 per cent of the regular budget, of which 67.5 per cent represents the cost of local (area) staff and 4.2 per cent represents the cost of international staff. Supplies account for 12.2 per cent, 51.7 per cent of which are donated to the Agency in kind. All other categories account for less than 5 per cent each. Table I.5 shows the resource growth in each category of expenditure. This is explained below.

1.17 International staff : all costs associated with international staff. Resource growth of $2.9 million (11.0 per cent) over 2000-2001 appropriations is attributed to the following reasons:

(a) $1.8 million to cover the cost of seven additional international posts;

(b) $1.1 million due to increase in budget standard costs for the international staffing table.

1.18 Area staff : all costs associated with area staff, including hiring of persons on temporary assistance or other contractual basis. The resource growth of $26.6 million (6.4 per cent) over 2000-2001 appropriations is attributable to the following reasons:

(a) $18.3 million for 2,113 additional area staff posts to partially meet natural growth requirements as explained above;

(b) $5.8 million for the annual increment costs;

(c) $2.5 million for other staff allowances.

1.19 Services : services bought by the Agency in the course of its operations, including hospital services, port services, customs clearance, hired transport, mail/phone services, travel and staff training. The resource growth of $6.2 million (22.2 per cent) over 2000-2001 appropriations is attributable to the following:

(a) Inclusion in the budget of $1.0 million for staff training;

(b) An increase of $4.9 million in hospitalization services (Lebanon $3.6 million and other fields $1.3 million);

(c) An increase of $300,000 in other services.

1.20 Operational reserves : provisions to meet expenditure at the field level which could not have been foreseen at the time of budget preparation. These are considered part of the direct programme costs. The negative resource growth is due to a reduction in accordance with actual utilization in the previous biennium.

1.21 Supplies : supplies purchased by the Agency and received in kind, including food ration commodities, medical supplies, textbooks, fuel, spare parts and office supplies. The resource growth of $11.8 million (16.5 per cent) over 2000-2001 allocations is due to the following:

(a) An increase of $4.0 million in basic commodities received in kind due to an increased number of eligible special hardship cases;

(b) An increase of $4.0 million in the cost of medical supplies due to higher prices and an increase in the projected number of patient visits;

(c) An increase of $2.8 million in the cost of textbooks due to the introduction of new curricula by the host authorities;

(d) An increase of $700,000 in transport supplies due to an increase in fuel prices ;

(e) An increase of $300,000 in miscellaneous supplies.

1.22 Equipment and construction : all equipment, including computer hardware and software, furniture, and vehicles, as well as minor construction works. The resource growth of $3.8 million (70.8 per cent) over 2000-2001 appropriations is attributable to the following:

(a) $1.7 million for new vehicles to catch up with the replacement schedule for vehicles which are overdue for replacement. Out of a total number of 762 vehicles, 109 vehicles need to be replaced immediately;

(b) $600,000 for replacement of old personal computers owing to the introduction of the new finance management system and payroll and human resources systems;

(c) $600,000 for replacement of unserviceable equipment and furniture due to be surveyed during the biennium;

(d) $200,000 for minor construction works, for example, school sheds;

(e) A low level of appropriations in 2000-2001.

1.23 Premises : rent, maintenance, electricity and water for premises. The resource growth of $800,000 (6.1 per cent) over 2000-2001 appropriations is due to the following:

(a) An increase of $600,000 for maintenance of premises to avoid further deterioration of buildings;

(b) An increase of $200,000 in the rates for utilities.

1.24 Grants and subsidies : direct payments to beneficiaries as part of programme activities, including hospitalization subsidies, support to community centres and food support cash grants. The resource growth in this category of expenditure of just below $1.0 million is due to the increase in the cash subsidy for the increased number of special hardship cases.

1.25 Other requirements : Agency-wide reserves not yet attributable to fields or programmes as follows:

(a) $14 million to rebuild the Agency’s working capital to a minimum level of one month’s cash flow requirements of $28 million over a four-year period, none of which is yet funded;

(b) $15 million for a minimum annual salary increase of 2 per cent for the Agency’s area staff to partially compensate for the 20 per cent erosion in the value of their nominal salaries since 1996;

(c) $2 million for a contingency reserve to cover unforeseen expenditure during the biennium.


Table I.6
Summary of requirements by programme

(in thousands of United States dollars)
Resource growth
Programme
1998-1999 expenditures
2000-2001 appropriations
2002-2003 estimates
Amount
Percentage
Education programme
302 391
328 371
351 321
22 950
7.0
Health programme
98 552
107 703
119 573
11 870
11.0
Relief and social services programme
56 697
62 442
68 538
6 096
9.8
Operational services
32 070
35 787
39 435
3 648
10.2
Common services
43 323
48 980
56 903
7 923
16.2
Subtotal
533 033
583 283
635 770
52 487
9.0
Working capital requirements
0
14 000
14 000
0
0.0
Salary increase requirements
0
12 000
15 000
3 000
25.0
Contingency reserve
0
2 000
2 000
0
0.0
Residual effect of current emergency
0
0
8 059
8 059
0.0
Total requirements
533 033
611 283
674 829
63 546
10.4

Figure I.3
Summary of requirements by programme

(in thousands of United States dollars)

Distribution by programme

Figure I.4
2002-2003 regular budget by programme

(cash and in-kind, in thousands of United States dollars)

1.26 Figure I.4 shows the 2002-2003 regular budget by programme activity. Direct allocations to the education programme account for 52.6 per cent of the regular budget, followed by the health programme (18.0 per cent) and the relief and social services programme (10.3 per cent). The remaining portion represents support costs and items budgeted centrally, including working capital and area staff salary increase requirements.

1.27 Table I.6 provides information on resource growth in the Agency’s programmes for the biennium 2002-2003 over budget appropriations of the biennium 2000-2001. The resource growth shown in the table is summarized below. A detailed explanation is provided in the respective chapters relating to each programme. Reference should also be made to paragraphs 1.17 to 1.25 above.

1.28 Education programme : the growth of $22.9 million in the education programme (7.0 per cent) over 2000-2001 appropriations is due to additional teaching staff requirements, additional textbooks and replacement of dilapidated school furniture.

1.29 Health programme : the resource growth in the health programme of $11.9 million (11.0 per cent) over 2000-2001 appropriations is attributed to additional health staff requirements, an increase in the hospitalization budget and increased medical supply requirements.

1.30 Relief and social services programme : the resource growth in the relief and social services programme of $6.1 million (9.8 per cent) over 2000-2001 appropriations is due to the increase in basic commodities and cash subsidies for special hardship cases, and staff costs in respect of additional social workers.

1.31 Operational and technical services : the resource growth of $3.6 million in operational and technical services (10.2 per cent) over 2000-2001 appropriations is attributed to the cost of replacing old vehicles, staff costs and the installation of the satellite wide area network.

1.32 Common services : the resource growth of $7.9 million in common services (16.2 per cent) over 2000-2001 appropriations is attributed to the additional international and area staff requirements.


Table I.7
Summary of requirements by field

(in thousands of United States dollars)
Resource growth
Field
1998-1999 expenditures
2000-2001
appropriations
2002-2003 estimates
Amount
Percentage
Gaza
155 186
173 872
191 980
18 108
10.4
Lebanon
76 876
87 824
98 265
10 441
11.9
Syrian Arab Republic
38 223
43 660
53 026
9 366
21.5
Jordan
138 804
142 352
143 831
1 479
1.0
West Bank
90 806
97 857
103 361
5 504
5.6
Headquarters
33 138
37 718
45 307
7 589
20.1
Subtotal
533 033
583 283
635 770
52 487
9.0
Working capital requirements
0
14 000
14 000
0
0.0
Salary increase requirements
0
12 000
15 000
3 000
25.0
Contingency reserve
0
2 000
2 000
0
0.0
Residual effect of current emergency
0
0
8 059
8 059
0.0
Total requirements
533 033
611 283
674 829
63 546
10.4

Figure I.5
Summary of requirements by field

(in thousands of United States dollars)


Distribution by field

Figure I.6
2002-2003 regular budget by field

(cash and in-kind, in thousands of United States dollars)

1.33 Figure I.6 shows the 2002-2003 regular budget by field of operation. Direct allocations for field operations account for 88.5 per cent of the regular budget. Taking into account the allocation of the requirements for working capital and salary increases to fields in the course of budget implementation, the percentage rises to 93.2 per cent. Headquarters costs represent 6.8 per cent of expenditure. The distribution of expenditure across fields does not reflect any substantive difference in services, but rather variations in the clientele population, United States dollar exchange rates, and costs within the area of operations as well as differing levels of service provision by host authorities.

Residual effect of current emergency situation

1.34 In response to the current crisis in the West Bank and Gaza, UNRWA launched three emergency appeals for a total of $159 million covering emergency activities from October 2000 to December 2001. While emergency needs beyond this period cannot be foreseen at this time, the Agency expects the ongoing crisis to have a significant residual impact on its regular budget (see table I.8 below).



Table I.8
Residual effect of current emergency on regular programmes

(in thousands of United States dollars)
Gaza
West Bank
Total
Programme
2002
2003
2002
2003
2002
2003
2002-2003
Education
656
0
344
344
1 000
344
1 344
Health
459
544
748
684
1 207
1 228
2 435
Relief
1 041
843
845
874
1 886
1 717
3 603
Other
0
0
437
240
437
240
677
Total
2 156
1 387
2 374
2 142
4 530
3 529
8 059

1.35 Indeed, the relief, health and education programmes have already incurred expenditures that stem from the crisis but are not funded by the emergency appeals. For example, the number of special hardship cases has increased in Gaza and the West Bank in line with the rising poverty rate, thereby expanding the clientele eligible for Agency assistance. In addition, increased demand for Agency medical services from patients unable to access private health care owing to movement restrictions, or unable to afford private care owing to loss of income, has driven up hospitalization costs and the Agency’s medical supply expenditure. New remedial education programmes for pupils whose schooling has been interrupted by the crisis also place a strain on the Agency’s regular budget.

1.36 The Agency has therefore included a separate $8 million line item in the biennium budget to cover the estimated residual costs of emergency activities that will be borne by its regular programmes. These requirements are not a substitute for emergency support. Instead, they represent additional needs in the regular budget resulting from the impact of the emergency situation on the Agency’s regular programmes.


Staff costs

Table I.9
International staffing requirements, 2002-2003
Post grade
Posts funded out of United Nations regular budget
Posts funded from UNRWA
budget and other sources
A. Professional and above
USG
1
0
ASG
1
0
D-2
2
2
D-1
11
1
P-5
17
5
P-4
37
4
P-3
18
1
P-2/P-1
2
3
Subtotal (A)
89
16
B. General services and others
Principal level
0
0
Other level
11
1
Subtotal (B)
11
1
Total (A + B)
100
17a
a Includes five posts not covered by the United Nations regular budget, 2 posts funded by project funds, four junior professional officers funded by Governments, three posts funded by the United Nations Educational, Scientific and Cultural Organization, one post funded by the World Health Organization, one post funded by the microfinance and microenterprise programme, and one post funded by the Provident Fund.

1.37 Decreasing financial resources over the last few years has resulted in a reduction in UNRWA international staffing from 138 posts in June 1996 to only 110 posts in June 2001, while the refugee population and their needs have increased significantly. Under any scenario, UNRWA will face an increased workload and a demand for personnel with specialized skills. In addition to the Agency’s current responsibilities, it is envisioned that new demands will arise in the areas of: political analysis, legal advice, relief and social services, logistics, administration and human resources, and security.

1.38 Through its resolution 3331 B (XXIX) of 17 December 1974, the General Assembly decided that the expenses relating to the emoluments of international staff in the service of UNRWA, which would otherwise have been charged to voluntary contributions, should be provided for under the regular budget of the United Nations with effect from 1 January 1975 for the duration of the Agency’s mandate.

1.39 The precarious financial situation of UNRWA, the increasing workload and the volatile operating environment necessitate a small increase in its international staffing table for the 2002-2003 biennial budget. Seven additional international staff posts are proposed for the 2002-2003 biennium. Of these, only two have so far been approved for inclusion in the regular budget of the United Nations. The Agency must therefore fund five of these additional international posts from its General Fund, thereby straining the already limited voluntary contributions available to UNRWA.

Table I.10
Estimated number of area staff at end 2003, by programme and field
Programme
Jordan
Lebanon
Syrian Arab Republic
West
Bank
Gaza
Strip
Head-
quarters
Total
Education
5 001
1 975
2 242
2 639
6 287
74
18 218
Health
900
524
465
694
1 004
15
3 602
Relief and social services
123
104
94
131
215
15
682
Microfinance and microenterprise
4
1
0
40
110
0
155
Operational services
129
169
150
196
314
104
1 062
Common services
130
163
109
215
214
181
1 012
Total
6 287
2 935
3 060
3 915
8 144
389
24 730

Figure I.7
Estimated number of area staff at end 2003, by field

1.40 In 1999, UNRWA introduced new Area Staff Rules to alleviate the acute financial pressures facing the Agency. The salary scale under the new Area Staff Rules are lower than the pre-1999 salary scales by 20 to 40 per cent. Currently, 20 per cent of the Agency’s area staff are employed under the 1999 Area Staff Rules. While from the perspective of cost savings, the 1999 Area Staff Rules have been effective, they have undercut the Agency’s capacity to continue attracting and retaining qualified personnel. The introduction of the 1999 Area Staff Rules also created a situation whereby staff in the same function and location do not receive equal pay for equal work (a basic United Nations principle) as a result of the application of two different pay scales.

Project budget

1.41 The project budget represents the Agency’s best estimate at the time of budget preparation of its immediate project funding requirements for the 2002-2003 biennium. During the biennium, the Agency will present donors with project proposals corresponding to the project budget.


Table I.11
Project budget by programme

(in thousands of United States dollars)
2002
2003
Total
2002-2003
Education
General education
20 842
21 275
42 117
Vocational and technical education
4 639
6 286
10 925
Teacher education
145
15
160
Programme management
96
96
    Subtotal
25 626
27 672
53 298
Health
Medical care services
1 978
1 043
3 021
Environmental health
8 709
14 372
23 081
Nutrition and supplementary feeding
0
0
0
Programme management
320
175
495
    Subtotal
11 007
15 590
26 597
Relief and social services
Relief services
8 740
8 740
17 480
Social services
2 287
2 527
4 814
Programme management
2 169
2 000
4 169
    Subtotal
13 196
13 267
26 463
Microfinance and microenterprise prog.a
4 855
4 690
9 545
Operational services
150
150
300
Common services
706
0
706
    Total project budget
55 540
61 369
116 909
a Includes $2.5 million each year funded from the programme’s income.


1.42 Table I.11 shows a breakdown of the project budget by programme and figure I.8 shows how this budget is split between the fields. The project budget amounts to $55.5 million for the year 2002 and $61.4 million for the year 2003. These amounts represent 15 per cent of total budget volume for the biennium. With the exception of the microfinance and microenterprise programme, a self-funded project for which recurrent costs amount to $2.5 million annually, the project budget represents unfunded activities.

Figure I.8
2002-2003 project budget by field

(in thousands of United States dollars)

Sources of funding

1.43 UNRWA is funded through a variety of sources. Figures I.9 and I.10 show the expected sources of funding for each year of the Agency’s total budget volume for the years 2002 and 2003 respectively, covering both the regular budget and projects.

Figure I.9
Expected funding of 2002 total budget volume

(cash and in-kind, in thousands of United States dollars)


Figure I.10
Expected funding of 2003 total budget volume

(cash and in-kind, in thousands of United States dollars)

1.44 As UNRWA does not have a system of assessed contributions, its budget is funded almost entirely by voluntary cash and in-kind contributions from Governments and the European Community. Voluntary contributions are expected to cover about 95.0 per cent of total budget volume for 2002-2003, of which 75.0 per cent are cash contributions to the GF, 14.0 per cent cash contributions to projects, and about 6.0 per cent are in-kind contributions.

1.45 The funding of 100 international posts out of the United Nations regular budget accounts for about 3.5 per cent each year of total budget volume. The remaining 1.5 per cent of expected income is from the following sources:

(a) Programme support costs of $2.0 million annually, charged on project-funded activities. This amount is credited against common services expenditure in the Agency’s accounts;

(b) Income of $2.5 million annually for the microfinance and microenterprise programme from its own credit activities covers the programme’s recurrent costs, making the programme entirely self-sustaining;

(c) Interest income of $1.0 million per annum;

(d) Funding of nine posts (3 international and 6 local posts) by the United Nations Educational, Scientific and Cultural Organization (UNESCO) and four posts (1 international and 3 local posts) by the World Health Organization (WHO) as part of their technical assistance to the education and health programmes, respectively ($970,000 per annum).

Attribution of common costs

1.46 Traditionally, UNRWA has divided expenditure not directly attributable to programmes into two categories: operational and technical services, and common services. While operational and technical services represent support functions integral to programme implementation on the ground, such as procurement and logistics services, transport, architecture and engineering, common services represent support functions according to the more common definition, such as administration, human resources, finance, legal and audit.

1.47 Both operational and common services are functions essential to programme activities and the functioning of the Agency as a whole. The distinction between them relates to the operational character of UNRWA activities, which involve significant logistical and infrastructural components. The extent of operational services activities varies with the volume of programme activities.

1.48 Table I.12 shows the allocation of the respective share of these common costs to the Agency’s substantive programmes. The allocation of the operational and technical services costs has been based on the volume of the procurement budget of each programme’s relative budget weight, and the mileage estimate for the transport services. The allocation of the common services costs is based on the relative budget weight for the substantive programmes.


Table I.12
Attribution of operational and common costs to programmes in the regular budget

(in thousands of United States dollars)
2002
2003
Education
172 255
179 066
Operational and technical services
10 280
10 014
Common services
20 310
19 091
Adjusted education budget
202 846
290 171
Health
58 911
60 662
Operational and technical services
5 607
5 600
Common services
6 007
5 942
Adjusted health budget
70 525
72 204
Relief and social services
33 630
34 908
Operational and technical services
3 929
4 005
Common services
2 288
2 264
Adjusted relief and social services budget
39 847
41 177
Operational services
19 816
19 619
Education
(10 280)
(10 014)
Health
(5 607)
(5 600)
Relief and social services
(3 929)
(4 005)
Adjusted operational and technical services budget
0
0
Common services
28 606
28 297
Education
(20 310)
(20 091)
Health
(6 007)
(5 942)
Relief and social services
(2 288)
(2 264)
Adjusted common services budget
0
0


External factors affecting the operations of UNRWA

1.49 UNRWA operates in a turbulent region buffeted by the Arab-Israeli conflict and its consequences in terms of episodes of violence, waves of mass displacement of population and worsening of the socio-economic situation.

1.50 The imposition of border closures and restrictions on humanitarian access by Israeli authorities in the West Bank and Gaza Strip, where the Agency’s operations account for some 45 per cent of the regular budget, and the imposition of charges at Israeli ports for goods destined for the West Bank and Gaza Strip, create additional economic costs for the Agency and hamper its operations.

1.51 The budget of UNRWA, funded entirely by voluntary contributions (cash and in-kind), is subject to uncertainties in the timing and value of funding receipts. This limits the ability of the Agency to plan and implement programme and project activities.

1.52 Although UNRWA expenditure is mostly incurred in United States dollars, 60 per cent of the income is received in non-United States dollar currencies, thus exposing the Agency to the risks of currency fluctuations.

1.53 Changes in the labour market in the region have rendered the Agency no longer competitive in recruiting personnel. About 99.5 per cent of UNRWA staff are area employees, many of whom can now find better opportunities outside UNRWA.

1.54 Support from, and increased coordination between, the Agency and host Governments, other United Nations agencies, non-governmental organizations and the refugees themselves (through their camp committees), contribute to the effective delivery of services by UNRWA.

1.55 Financial support from the United Nations organizations has been scaled down since 1995 mainly by a reduction in the number of international staff on loan from UNESCO and WHO from 29 posts to only four posts at a time when the Agency is increasingly unable to recruit and retain senior area professional managers at current pay rates.

1.56 The introduction of new programmes, such as English language and information technology courses, into school curricula, a change of textbooks and the introduction of expensive vaccines into the national immunization programmes place an additional burden on scarce UNRWA resources that must accommodate these unplanned activities. Additional unplanned expenditure results from sudden increases promulgated by host authorities in the cost of services, such as medical care, port charges or the cost of supplies, such as fuel.

1.57 Worsening socio-economic conditions and increased rates of unemployment in the Agency’s area of operation contribute to school dropouts, increased demand on medical care services, compromised community participation and a breakdown in cost-sharing systems.

1.58 Restrictions imposed by host Governments on importation of medicines and food commodities result in disruption of services and additional expenditure.

1.59 Emergency situations, especially in the Gaza Strip and the West Bank, represent a threat to the sustainability and quality of UNRWA services and call for recourse to emergency appeals, which may compete with the fund-raising for the regular budget.

1.60 Inadequate project funding for school construction and upgrading of camp infrastructure contributes to overcrowded schoolrooms, poor environmental health conditions and dilapidation of refugee shelters. All call for substantial investment in capital projects.

1.61 The current unrest in Gaza and the West Bank and the Israeli response to it has brought about new challenges and placed additional demands on UNRWA services in terms of emergency preparedness and response. The situation has also disrupted the Agency’s ability to deliver its services and resulted in additional expenditure to counteract obstacles imposed by the Israeli authorities.

Programmes of work

1.62 The following chapters detail the programme of work for each of the substantive programmes and support services of UNRWA. The final chapter details the project budget.


Chapter II
Education programme

Mission

2.1 The mission of the Agency’s education programme is to help Palestine refugee children and youth acquire the basic knowledge and skills needed to become productive members of their communities in accordance with their needs, identity and cultural heritage.

Structure

2.2 The Agency’s education programme consists of four main subprogrammes: general education, technical and vocational education and training, teacher education and education planning and management. For planning and budgeting purposes, activities are broken down into eight main and subprogrammes as shown:

Table II.1
Structure of Agency’s education programme
Main subprogramme
    Subprogramme activity
General education
    Elementary and preparatory education

    Secondary education (Lebanon)

Technical and vocational education and training
Teacher education (pre-service)
Education planning and management
    In-service teacher education

    Placement and career guidance

    Programme management

    University scholarships ( being phased out)

Objectives

2.3 Provision of general education for Palestine refugee children and youth at the elementary and preparatory levels, as well as at the secondary level, on a limited basis, in Lebanon only.

2.4 Provision of university-level pre-service teacher education for young Palestine refugees as well as in-service teacher education for UNRWA teachers to enable them to improve the quality of education in UNRWA schools.

2.5 Provision of vocational and technical education and training for young Palestine refugees to enable them to become productive citizens and contribute to the well-being of their communities.

2.6 Provision of job placement assistance for the graduates of the Agency’s vocational training centres and enhancing career guidance and counselling services for the Agency’s preparatory and secondary school students as well as vocational and technical graduates.

Programme activities

2.7 The Agency’s education programme is the largest in UNRWA in terms of staff employed and the allocated financial resources. In the school year 2000/2001, the total number of staff employed for the activities of the programme stood at 16,171, representing approximately 70 per cent of the total staff of the Agency. During the school year 2000/2001, the Agency’s education programme provided basic education for 477,216 pupils in the elementary, preparatory and secondary cycles, vocational and technical education for 4,704 trainees and pre-service teacher education for 1,530 students in the three education science faculties in the West Bank and Jordan fields and the teacher training section in Lebanon. In addition, 938 teaching and administrative staff were enrolled in the in-service teacher training programme. Table II.2 shows data on the Agency’s education programme for the 2000/2001 school year.

Table II.2
Data on Agency’s education programme for 2000/2001 school year
Jordan
Lebanon
Syrian Arab Republic
West
Bank
Gaza
Strip
Head-
quarters (A)
Total
Elementary schools
62
35
60
25
122
-
304
Preparatory schools
128
36
50
70
46
-
330
Secondary schools
-
5
-
-
-
-
5
Total number of schools
190
76
110
95
168
-
639
Vocational training centres
2
1
1
3
1
-
8
Education science faculties and pre-service teacher educationa
1
1
-
2
-
-
4
a The three education science faculties are located in Amman and in Ramallah-West Bank (men’s and women’s training centres), while the pre-service teacher training is located at the Siblin Training Centre, Lebanon.

2.8 UNRWA began providing education services for Palestine refugees in 1950. In 1953, representatives of Arab host countries, UNRWA and UNESCO agreed that the Agency’s education programme should follow the education structure of the host Governments, including the curricula and textbooks. This provision was intended to facilitate the movement of students between UNRWA and government schools, the entrance of UNRWA students to the secondary school level, which the Agency does not offer (except in Lebanon) and, consequently, to allow them to sit for government exams as a first step in pursuing higher education. Since 1993, and in view of the special situation of Palestine refugees in Lebanon, the Agency began to provide secondary education on a limited basis in the Lebanon field.

2.9 Based on an agreement signed between UNESCO and UNRWA in 1951, UNESCO assumed technical responsibility for the UNRWA education programme through the secondment of a number of technical and managerial staff on the basis of a non-reimbursable loan to the Agency. The 1959 agreement stipulated that UNESCO would provide UNRWA with 14 international posts, including the Director of Education. This level of support for the Agency’s education programme was maintained until 1993. In 1994, the level of support began to diminish through a reduction in the number of UNESCO-funded posts from 14 to 10. In 1996, the number of posts was further reduced to four. Currently, UNESCO provides three international posts, including the Director of Education, and finances the salaries of four local posts. Also in 1994, UNESCO ceased its technical support for the UNRWA education programme, which covered the provision of scholarships, fellowships, equipment, consultants and audio-visual aids.

2.10 The Agency opened its first vocational training centre in Kalandia Camp near Jerusalem in 1953, and began a vocational education and training programme for Palestine refugees. In 1962 the Agency opened the first women’s training centre in the Arab world and tailored courses to women’s needs and cultural expectations. Today, the Agency operates eight such training centres (three in the West Bank, two in Jordan and one each in Gaza, the Syrian Arab Republic and Lebanon).

2.11 Since 1962, as a result of the growing needs in the Agency’s area of operations, the Agency began providing teacher training services to upgrade the qualifications and competencies of its teachers. In 1964, the UNRWA/UNESCO Institute of Education was established to provide in-service and pre-service teacher training programmes, utilizing an integrated multimedia approach that influenced teacher-training efforts in many Arab countries.

2.12 Since the early 1960s, the Agency has made available placement services to the graduates of its training centres and pre-service teacher training programmes, as well as vocational guidance, to the students in its preparatory schools and in local authorities’ secondary schools to facilitate the recruitment of trainees for its training centres.

2.13 The Agency has provided scholarships for outstanding Palestine refugees to pursue their higher education since 1955. Since 1997, owing to lack of financial resources, no regular budget allocations have been made for this programme. Funding is now available only through project contributions.

Constraints and challenges

2.14 There is a continuous increase in average classroom occupancy rates in UNRWA schools. The overall average classroom reached 43.5 pupils in the school year 2000/2001. This has negatively affected the quality of education by reducing the level of student-teacher interaction.

2.15 The large annual increase in the student population, insufficient funds for school construction, and at times non-availability of land on which to construct school premises, have forced the Agency to adopt practices that have an adverse effect on students. The Agency, for instance, is renting buildings for use as schools that are lacking in basic facilities. In addition, the Agency currently operates 74 per cent of its schools on a double-shift basis, while about 17 per cent of the administrative schools are in unsuitable rented premises lacking proper educational conditions. The area per student in UNRWA schools ranges between 0.83-1.17 m², an average of 1 m² per student, which is low compared with UNESCO standards (1.40-1.50 m² per student).

Figure II.1
Classroom occupancy rates: Agency vs host country and Palestinian
Authority schools

2.16 Operating schools on a double-shift basis reduces the time available to students in which to learn because it shortens the school day. It also hampers the provision of extracurricular activities, thus negatively affecting the integrated personality development of the pupils. Preliminary studies done by the Department of Education show that, in achievement tests, the performance of pupils in double-shift schools is inferior to that of pupils in single-shift schools.

2.17 The 1999 Area Staff Rules, under which new Agency employees are recruited at lower pay scales, have created workplace friction by virtue of the fact that teaching staff in the same school doing the same job receive unequal pay. This has lowered teacher morale, led to delays in filling vacant posts and posed a challenge to the retention of competent teaching staff.

2.18 As a result of the austerity measures introduced in 1993, the education programme continues to suffer from a lack of sorely needed support staff, such as school counsellors, librarians and school attendants. This situation has adverse effects on the quality of the education services provided, as the workload on teaching staff has considerably increased.

2.19 The increase in the number of schools operating on a double-shift basis and the limited financial resources for maintenance have resulted in a deterioration of physical facilities to such a level that many schools are in need of either demolition, reconstruction or comprehensive maintenance.

2.20 Similarly, owing to the overuse of the school furniture and equipment, especially in the double-shift schools, and the lack of funds to maintain them, the condition of some of the furniture is unsafe.

2.21 As a further consequence of the 1993 austerity measures, no new vocational training courses have been introduced except by securing project funding, or by making shifts within the existing courses, i.e., dropping courses from the curriculum in order to introduce new courses more suited to the labour market. This situation is preventing the Agency from introducing new courses in a systematic and pedagogically constructive manner to meet the growing demand for vocational and technical education in the local labour market and neighbouring Arab countries.

2.22 Since UNRWA follows the curricula of the host authorities, any developments in the educational system, curricula or textbooks must be implemented by UNRWA. In most cases, such activities require additional funds that have not been secured. Examples of such changes are:

(a) Extension of the preparatory cycle in the West Bank and Gaza from 9 to 10 grades; despite repeated requests by the Palestinian Authority, the Agency could not introduce this grade owing to budgetary constraints;

(b) New study plans introduced by the host countries or the Palestinian Authority, such as music and hobbies in Jordan and computer science for grades 7 to 9 in the West Bank, could not be completely adhered to because of a lack of funds.

Resource requirements


Table II.3
Education programme resource requirements by activity

(cash and in-kind, in thousands of United States dollars)
1998-1999 expenditure
2000-2001 appropriation
2002-2003 estimates
Percentage increase
2002-2003 over
2000-2001
General education
Elementary education
160 814
172 784
187 075
Preparatory education
103 604
111 265
116 973
Secondary education (Lebanon)
85
1 813
3 362
Subtotal
264 503
285 862
307 410
7.5
Vocational and technical education
25 065
26 205
27 278
4.1
Pre-service teacher education
1 958
2 267
2 199
-3.0
Education planning and management
In-service teacher education
821
1 829
1 811
Placement and career guidance
101
140
150
Programme management
9 943
12 068
12 473
Subtotal
10 865
14 037
14 434
2.8
Total regular budget
302 391
328 371
351 321
7.0
Total project budget
26 089
62 351
53 298




Table II.4
Education programme resource requirements by category of expenditure

(cash and in-kind, in thousands of United States dollars)
1998-1999 expenditure
2000-2001 appropriation
2002-2003 estimates
Increase
2002-2003 over
2000-2001
StaffInternational staff
1 034
900
961
Local staff
284 227
301 696
320 261
Subtotal
285 261
302 596
321 222
18 626
ServicesTravel
345
419
480
Communication
66
90
222
Transport services
63
71
35
Training
9
22
86
Miscellaneous services
1 406
327
347
Consultancy services
72
99
81
Subtotal
1 961
1 028
1 251
223
SuppliesMedical supplies
69
111
226
Transportation supplies
45
70
60
Clothing supplies
294
344
350
Textbooks and library books
4 714
8 211
10 989
Sport supplies
124
252
256
Fresh food
1 019
1 196
1 168
Miscellaneous supplies
3 315
3 706
4 005
Teaching supplies
243
479
477
Basic commodities
257
417
401
Subtotal
10 080
14 786
17 932
3 146
Equipment and construction Computer hard/software
202
134
447
Equipment and furniture
1 213
505
1 071
Construction
208
220
456
Subtotal
1 623
859
1 974
1 115
PremisesRental of premises
1 565
1 575
1 648
Utilities
1 824
1 842
2 077
Maintenance
0
4 701
5 040
Subtotal
3 389
8 118
8 765
647
Grant and subsidies
77
78
77
-1
OtherReserves
0
906
100
Subtotal
0
906
100
-806
Total regular budget
302 391
328 371
351 321
22 950
Total project budget
26 089
62 351
53 298


Budgetary comments

2.23 Table II.4 above indicates a resource growth in the education programme of $22.9 million (7.0 per cent) over 2000-2001 appropriations. This is explained as follows:

(a) An increase of $18.6 million in staff costs to the following:


(b) An increase of $2.8 million in the cost of school textbooks due to the introduction of new curricula by the host authorities;

(c) An increase of $1.2 million for replacement of school furniture and equipment and additional minor construction and maintenance works;

(d) Other minor increases of $300,000 in miscellaneous supplies.


Chapter III
Health programme

Mission

3.1 The mission of the Agency’s health programme is to protect, preserve and promote the health status of the registered Palestine refugees and to meet their basic health needs in a manner consistent with the basic principles and concepts of the World Health Organization and with the standards achieved by the public health sector in the Agency’s area of operations.

Structure

3.2 Health is the second largest UNRWA programme: 18 per cent of the Agency’s budget for the biennium 2002-2003 is allocated to the health programme. The 3,500 staff members employed in the programme in the year 2001 constitute 15 per cent of all Agency staff. Medical care services take up the largest share of health expenditure, approximately 72 per cent of the cash budget, most of which is in staff costs. The administrative costs of the health programme at headquarters and in the fields make up only 5.0 per cent of the total 2002-2003 regular budget.

3.3 Organizationally, the health programme comprises four main divisions: medical care services, disease prevention and control, family health and environmental health services. For budget and planning purposes, activities are broken down into 14 subprogrammes as shown in table III.1.

Table III.1
Structure of the health programme
Main activity Subprogramme activity
Medical care servicesLaboratory services

Outpatient services

Maternal and child health

Disease prevention and control

Physical rehabilitation

Oral health

School health

Hospital services

Environmental healthSewerage and drainage

Solid waste management

Water supply

Special environmental health programme (Gaza)

Supplementary feeding Supplementary feeding
Programme managementProgramme management

Objectives

3.4 The main objectives of the Agency’s health programme during the biennium 2002-2003 will be focused on the following:

(a) Preserving the sustainable investment achieved in primary health care by implementing appropriate intervention strategies with a high potential impact on health outcomes, especially in the areas of disease prevention and control and maternal and child health;

(b) Enhancing the process of institutional capacity-building in order to maximize system performance, improve service quality and increase efficiency and cost-effectiveness;

(c) Maintaining environmental health conditions in refugee camps compatible with the levels provided by local municipalities by implementing developmental projects to improve water, sewerage and drainage and solid waste disposal facilities;

(d) Harmonizing health policies and service standards with those of the host authorities in order to make optimal use of the scarce resources and to avoid incompatible priorities;

(e) Preventing breakdowns in service delivery, quality and sustainability by responding to emergency situations arising as a result of the Arab-Israeli conflict.

Programme activities

3.5 WHO assumes technical supervision of the health programme under the terms of an agreement signed between UNRWA and WHO in 1950. WHO seconds to UNRWA the Director of Health on a non-reimbursable loan basis and currently covers the cost of three area division chief posts at headquarters (A). The Director of Health advises the Commissioner-General of UNRWA and the Director of WHO/Eastern Mediterranean Regional Office (EMRO) on all policy, technical and operational aspects of the Agency’s health programme.

3.6 The health programme maintains close collaborative links with ministries of health of the host Governments and the Palestinian Authority. Cooperation is focused on surveillance of communicable diseases, participation in national immunization campaigns, provision of vaccines for UNRWA, integration of environmental health projects into regional planning schemes, sharing of technical expertise and information, and joint participation on an ad hoc basis in health-related projects and training. Coordination on disease prevention and control is particularly emphasized owing to the possibility of disease transmission between the refugee population and national populations. Subject to availability of resources, the Agency strives to streamline health policies and service standards with those of public health systems to avoid duplication, overlap and incompatible priorities.

3.7 Primary health-care services are provided free of charge for Palestine refugee patients registered with UNRWA, to ensure full access to the range of preventive care services which reduce overall health costs. Refugees share health-care costs through co-payment towards secondary care, tertiary care, prosthetic devices, specialized medical investigations and non-programmed life-saving medicines. Community participation in health is further evidenced by self-help projects for paving of pathways and drains in refugee camps, modest payments by refugee families for connection of shelters to sewerage and water systems installed in camps, and the variety of cash and in-kind contributions by the community of Qalqilia towards the Agency hospital there.

3.8 Primary health-care services are provided directly by UNRWA through the Agency’s own network of facilities and employees. Except for Qalqilia Hospital, secondary care is provided through subsidies towards treatment in third-party hospitals, while certain environmental health services in refugee camps are also provided through contractual arrangements with local municipalities or private contractors.

Table III.2
UNRWA primary health-care facilities
Jordan
Lebanon
Syrian Arab Republic
West
Bank
Gaza
Strip
Total
Primary health-care facilities
23
25
23
34
17
122
Services integrated within primary
health-care facilities
Dental care
17
17
13
21
14
82
Family planning
23
25
23
34
17
122
Non-communicable disease care
17
25
23
34
14
113
Specialist care
13
15
15
20
13
76
Laboratories
21
15
19
25
14
94
Physiotherapy
1
-
-
6
6
13
Maternity
-
-
-
-
6
6

3.9 UNRWA adopts an integrated approach to primary health care, seeking to provide a full range of preventive, curative and diagnostic services at each health centre. This approach facilitates accessibility to services, ensures continuity of care and reduces the inconvenience involved in referral of patients from one level of care to another. It is also the most cost-effective approach to health-care provision, because it allows maximum utilization of human and physical resources while minimizing overhead costs.

3.10 UNRWA provides environmental health services for over 1.2 million Palestine refugees residing in 59 refugee camps in the five fields of operations. These services are provided in close collaboration with local municipalities of host authorities. Refugees living outside camps share the facilities and services that are readily available to the resident population. The purpose of the environmental health programme is to minimize risks to human health and prevent environmental degradation by maintaining optimal sanitary conditions and improving basic environmental health facilities in refugee camps.

3.11 Owing to restrictions imposed on establishment of non-teaching posts during the last two budget cycles, arrangements were made to redeploy posts in the administrative support category and lower priority areas to the most needed posts at the operational level. During the biennium 2000-2001, the Agency continued its efforts to achieve cost-efficiency gains mainly by redeployment of hospital beds from private to NGO hospitals at more competitive rates. In addition, the Agency contemplates the reduction of the recurrent costs associated with the labour-intensive system of garbage collection and disposal through mechanization of solid waste management in camps through project funds.

Constraints and challenges

3.12 Until 1964, 15 international posts were seconded from WHO on a non-reimbursable loan basis to UNRWA. In 1964, the number was reduced to seven posts. Owing to the financial difficulties of both organizations, the modalities of implementation of the 1950 agreement were amended as per a memorandum of understanding signed in 1995, according to which the number of posts was reduced to two, namely the posts of the Director of Health and the Deputy. WHO has kept recruitment for the latter in abeyance since then. Furthermore, WHO/EMRO diverted the annual allocation of $100,000 for fellowships to the Ministry of Health of the Palestinian Authority. This reduction in the level of technical and financial assistance rendered UNRWA increasingly unable to recruit or retain senior professional managers at its modest pay levels. In addition, the Agency could not sponsor fellowships for career progression and future replacement needs from its own resources, which placed additional constraints on programme management.

3.13 Owing to financial constraints, the per capita budget allocation on health during the biennium 2000-2001 was $14.55 per annum. Taking the allocations on environmental health services and food aid separately, the net per capita allocation on the full range of preventive and curative medical care services, both at the primary and secondary levels, was $9.30 per year. According to the World Health Report 2000,1 these allocations are far below public expenditure on health by countries in the Agency’s area of operations and compare with public expenditure in the world’s least developed countries. Notwithstanding the fact that the UNRWA health programme has been considered by the World Bank to be very cost-effective, such limited budgetary allocations make it difficult to keep pace with recent advances in medical technology, such as the introduction of new vaccines and screening for cancers.

3.14 The imbalance between the ever-increasing needs of and demands on UNRWA health services, on the one hand and the limited resources allocated to the programme, on the other, has been aggravated by the continuation of the freeze on recruitment and establishment of new posts over the last two budget cycles. This has undermined efforts to improve the organization and management of services at the delivery level as the overall health personnel/population ratios remained as low as 0.8 doctors and 2.2 nurses per 10,000 population. The corresponding rates are 13.8 doctors and 19.7 nurses/midwives per 10,000 in the Syrian Arab Republic and 16.6 doctors and 30 nurses/midwives per 10,000 population in Jordan.


Figure III.1
Ratio of health staff per 10,000 refugee population

3.15 The gap between the disease burden and the capacity of the system to detect and manage new groups of patients suffering from non-communicable diseases often associated with an unhealthy lifestyle and decreased life expectancy, such as diabetes mellitus, cardiovascular diseases and cancers, is widening year after year. While the strategic orientation of the programme advocates active surveillance and management of these diseases ahead of the need to meet the high cost of treating their complications and disabling effects, this approach has not been matched by a concomitant increase in resources in terms of staff, diagnostic facilities and supplies.

3.16 In spite of the marked progress which was attained under the Peace Implementation Programme launched by the Agency in October 1993, the restrictions imposed on preventive maintenance of premises and procurement of equipment have adversely affected the physical conditions of several primary health-care facilities. Substantial project funding needs to be secured to replace, rehabilitate and upgrade these facilities.

3.17 The workload at UNRWA health centres continued to be heavy with an Agency-wide average of 100 consultations per medical officer per day, and on average as high as 109 and 104 in the Gaza and West Bank fields, respectively. Not only do these heavy workloads reduce doctor-patient contact time, but they have also adversely affected the quality of care provided for patients. Furthermore, they continue to be the main obstacles to implementing effective appointment systems in general clinics in spite of the efforts exerted in this respect.

3.18 The long-desired objective of reducing the average number of consultations to not more than 70 per medical officer per day could not be pursued because of funding shortfalls and a recruitment freeze. Little progress towards improvement of the quality of care should be expected if this imbalance between needs and resources cannot be corrected.


Figure III.2
Average daily clinical workloads during 2000

3.19 The approved budget provisions under the General Fund continued to be disproportionate to the need to provide adequate assistance towards essential hospital services, especially in the Lebanon field. The Agency planned to cover the deficit through extrabudgetary contributions, but progress in this respect has been very limited. Likewise, the budget allocations for hospitalization in Jordan continued to be disproportionate to the need. Thus, assistance was limited to reimbursement of part of the costs incurred for treatment of emergency conditions at government hospitals and to subsidies for delivery related to high-risk pregnancies. A stable and predictable level of funding needs to be secured to prevent the undesirable health and political consequences of a failure to sustain hospital services, at least at the current level.

3.20 Poor environmental health conditions continue to pose a threat to health in many refugee camps. In spite of the progress made in constructing internal sewerage schemes and connecting camps to main municipal sewers over the last few years, 17 out of 58 refugee camps Agency-wide are still not connected to proper sewerage systems and are still served by surface drains. Inadequate surface water drainage in some camps produces stagnant pools where mosquitoes and other disease-carrying vectors breed, increasing the prevalence of vector-borne diseases. Badly maintained open drains often become substitutes for proper waste disposal facilities, with the dumping of garbage posing an obvious threat to health and the environment. In camps where no appropriate sewerage systems exist, effluent empties into adjacent fields often used for cultivation of vegetable crops, which increases the risk of disease transmission. Other threats arising from improper drainage include flooding and landslides causing damage to shelters built on marginal land.

3.21 The unrest in the Gaza Strip and the West Bank which erupted during the last quarter of the year 2000 and the Israeli response to it have brought about new challenges and placed additional demands on the health-care system in terms of emergency preparedness and response, while simultaneously struggling to maintain regular programme activities, and preserving the sustainable investment achieved in maternal and child health care, family planning and disease prevention and control.

Resource requirements


Table III.3
Health programme resource requirements by activity

(cash and in-kind, in thousands of United States dollars)
Activity
1998-1999 expenditure
2000-2001 appropriation
2002-2003 estimates
Percentage increase
2002-2003 over
2000-2001
Medical care servicesLaboratory services
2 636
3 254
3 995
Outpatient services
41 194
36 323
41 818
Maternal and child health
3 552
4 738
4 960
Disease prevention and control
0
6 168
8 806
Physical rehabilitation
0
1 306
1 342
Oral health
3 147
3 256
4 000
School health
754
944
877
Hospital services
15 301
15 237
20 089
Subtotal
66 584
71 226
85 887
20.6
Environmental healthSewerage and drainage
259
256
248
Solid waste management
16 035
18 392
16 459
Water supply
1 006
1 138
1 244
Special environmental health programme
985
1 211
929
Subtotal
18 285
20 997
18 880
-10.1
Supplementary feeding
8 466
9 057
8 727
-3.6
Programme management
5 217
6 421
6 079
-5.3
Total regular budget
98 552
107 701
119 573
11.0
Total project budget
16 118
29 263
26 597



Table III.4
Health programme resource requirements by category of expenditure

(cash and in-kind, in thousands of United States dollars)
Category
1998-1999 expenditure
2000-2001 appropriation
2002-2003 estimates
Increase
2002-2003 over
2000-2001
StaffInternational staff
662
645
388
Local staff
56 699
61 398
64 634
Subtotal
57 361
62 043
65 022
2 979
ServicesTravel
122
171
145
Communication
82
116
132
Transport services
37
35
36
Training
81
171
136
Miscellaneous services
2 029
2 258
2 373
Consultancy services
184
199
200
Hospital services
12 110
11 628
16 469
Subtotal
14 645
14 578
19 491
4 913
SuppliesMedical supplies
12 594
15 150
19 083
Transportation supplies
208
242
398
Clothing supplies
143
198
194
Library books
10
18
15
Fresh food
84
90
102
Miscellaneous supplies
749
1 044
1 051
Basic commodities
8 292
8 999
8 732
Subtotal
22 080
25 741
29 575
3 834
Equipment and construction Computer hard/software
19
80
27
Equipment and furniture
713
655
945
Construction
530
60
92
Subtotal
1 262
795
1 064
269
PremisesRental of premises
249
225
222
Utilities
561
635
645
Maintenance
0
722
804
Subtotal
810
1 582
1 671
89
Grants and subsidies
2 394
2 755
2 619
-136
OtherReserves
0
209
131
Subtotal
0
209
131
-78
Total regular budget
98 552
107 703
119 573
11 870
Total project budget
16 118
29 263
26 597


Budgetary comments

3.22 Tables III.3 and III.4 indicate a resource growth in the health programme of $11.9 million (11.0 per cent) over 2000-2001 appropriations. This increase is attributed to the following cost factors:

(a) A net increase of $ 3.0 million in staff costs resulting from the following:


(b) An increase of $4.9 million in hospitalization services due to the following:
(c) An increase of $ 4.0 million in medical supplies due to the following:

Chapter IV
Relief and social services programme

Mission

4.1 The mission of the Agency’s relief and social services programme is to provide the most disadvantaged Palestine refugees with humanitarian assistance, and to promote the self-reliance of less advantaged members of the refugee community, such as women, youth and the physically challenged. The Department also serves as the custodian of the historical records of some 4 million Palestine refugees.

Structure

4.2 The relief and social services programme is composed of two main programmes: relief services, consisting of four main subprogrammes, and social services, consisting of five main subprogrammes. Programme management constitutes a separate programme area. These are shown in table IV.1.


Table IV.1
Structure of Relief and Social Services Department
Main activitySubprogramme activity
Relief Services DivisionFood support for special hardship case families
Shelter rehabilitation
Selective cash assistance
Eligibility and registration
Social Services DivisionOrganizational development of community-based organizations
Women in development
Disability programme
Youth activities
Poverty alleviation programme
Programme managementProgramme management

4.3 Staffing for the activities of the Relief and social services programme for the 2000-2001 biennium stands at 527 employees, representing 2.7 per cent of the total number of UNRWA employees. Of this, the single largest category (41 per cent) of staff is comprised of social workers, through whom the bulk of the direct relief and social services are administered on the ground. Approximately 10 per cent of the Agency’s general budget is allocated to the programme, with the majority of the resources directed towards the food support subprogramme.

Objectives

4.4 Relief and social services is one of the Agency’s three core programmes, complementing the social development role played by the Health and Education Departments. While the Programme’s raison d’être since its inception has been the provision of direct humanitarian assistance, its scope has widened since 1989 to include a long-term developmental approach that targets the most vulnerable within the refugee community. These are most often individuals or families without sufficient access to employment or educational opportunities, information or capital resources. Most of the programme’s developmental activities are carried out through 135 community-based and community-run organizations in the camps, and most of the clients benefiting from the various humanitarian assistance subprogrammes (the special hardship case families) also fall within the roughly one third (31 per cent) of the overall refugee population still living within the borders of the 59 official camps.

4.5 While the programme is the smallest within the Agency in terms of budget allocation and staffing, its objectives continue to focus on the ever-growing short- and long-term humanitarian needs within the refugee community. Specifically, relief and social services will concentrate its efforts on the following goals:

(a) Providing the neediest eligible families with basic subsistence support (seeking to maintain the value of food assistance to the 5.6 per cent of the refugee population enrolled in the special hardship assistance programme at $115 per person/per annum);

(b) Improving the housing conditions of special hardship families;

(c) Assisting families with small-scale emergency needs during a family-specific economic or humanitarian crisis;

(d) Strengthening the institutional capacity of community organizations in the camps to better serve the needs and rights of the physically/mentally challenged, youth and women;

(e) Preserving the historical records of the registered refugees. This will involve the scanning and digital storage of an estimated 25 million documents housed in 341,000 “family files” in the five fields of UNRWA operation;

(f) Updating monthly and maintaining daily the content of the computerized registration records of approximately 4 million refugees; spearheading the implementation of the redesign of the refugee registration information system, to achieve a higher level of accuracy, dependability and validity as well as online data manipulation capabilities for the refugee records;

(g) Maintaining the capacity to respond to large-scale emergencies, with a special focus on the long-term programmatic implications of the 2000/2001 intifada in the West Bank and Gaza Strip on the demand for relief and social services;

(h) Maximizing the use of limited resources through increased operational efficiencies, inter-agency and interdepartmental cooperation, ongoing consultation with host authorities, programmatic, funding and professional collaboration with local and international NGOs and various cost-sharing and self-help mechanisms.

Programme activities

4.6 As of December 2000, 54,499 families were being assisted on a quarterly basis by the food support and cash subsidy “safety net”. This number will grow by 3.5 per cent each year in the new biennium, in recognition of the increasing numbers of refugees living below the poverty line. Food will continue to be distributed through the 63 Agency centres. Current and past patterns indicate that almost 75 per cent of food support will continue to be directed to three categories of clientele: families without an adult medically fit to earn an income (35.2 per cent), the elderly who can no longer support themselves (24.8 per cent) and families headed by a female who is widowed or abandoned by her husband (13.6 per cent). Some families, after careful assessment and screening by social workers, will receive one-time “ selective cash assistance” during an emergency on an “as needed” basis and/or upgrading of their shelters through repair or reconstruction. Priority, as before, will be given to special hardship case families and shelters that are unsafe or unhygienic. Funding levels do not generally permit reconstruction or expansion of shelters simply because they are overcrowded.

4.7 At the developmental level, increased opportunity will be given for families to improve their shelter conditions through use of a self-help approach. The 134 community-based organizations will also continue to contribute to the development of the surrounding refugee communities. More than 76,000 individuals, primarily women, youth and the physically or mentally challenged, are participating in the various services, skills training and awareness-building activities of these organizations, with an estimated 350,000 persons benefiting indirectly. This number is not expected to increase in the biennium 2002-2003, as funding does not currently facilitate the expansion of these organizations.

4.8 In addition to the continuation of the general programmatic activities, the following specific actions will be taken:

(a) Increasing the level of project funding through completion or updating of proposals and active cooperation with external relations to solicit donor support. Priority funding is sought for: (a) the redesign of the refugee registration information system and integration of the system with the family files archiving project as that is achieved, (b) shelter rehabilitation, both for the ongoing urgent needs as well as the special Neirab rehabilitation project in Aleppo, Syrian Arab Republic, and (c) investment in the “human capital” of the relief and social services programme through the provision of more systematic and upgraded in-service training;

(b) Implementing the findings of the programme’s strategic planning process to date, as staffing, time, and funding allow (key elements: vision, mission, underlying principles, key capabilities, updated strategies);

(c) Strengthening operations as outlined in the programme management section;

(d) Rectifying understaffing, particularly of social workers;

(e) Monitoring the impact of the intifada and searching for ways to counteract its repercussions on the relief and social service staff or operations in the West Bank and Gaza Strip;

(f) Increasing the use of the self-help approach to shelter rehabilitation, based on pilot projects in Gaza, Lebanon and Jordan.

4.9 The outbreak of the intifada in the West Bank and Gaza Strip in the last quarter of 2000 has highlighted the responsibility of relief and social services for organizing and delivering on-the-ground emergency aid to those most affected by the crisis. While this primarily involves food distribution to large numbers of families (both refugee and non-refugee, as appropriate), other forms of assistance are provided to the extent permitted by donor contributions. Continued necessity for this type of assistance in 2002-2003 will depend on the status of the political and socio-economic situation in the West Bank and Gaza Strip as well as donor support for extrabudgetary measures that need to be taken.

Constraints and challenges

4.10 Diminishing financial resources have led to steadily decreasing services for the refugees in the face of rising poverty and population growth, and have also necessitated a degree of core programme modification that has heightened the Agency’s dependence on project funding. While project funds provide a very welcome source of income, such funding may be sporadic, thereby hampering the ability of the programme to formulate viable long-term goals. For example, while staffing is available to administer the special hardship programme, no shelter rehabilitation for eligible special hardship families can be accomplished unless project funds are received. In 2000, an estimated $10 million was needed to address the most urgent housing needs; only one third of that amount was received.

4.11 The deteriorating economic situation in the West Bank and Gaza since the onset of the intifada has meant that many clients can no longer afford to pay fees for courses or otherwise share in the costs of services. This has had negative consequences on the income levels of the women’s programme centres, undercutting their ability to work towards financial sustainability and offer the same range of activities as previously.

4.12 Fluctuating currency rates may unexpectedly reduce the level of resources available to a subprogramme. For example, each special hardship beneficiary received $8 instead of the expected $10 cash subsidy during the last quarter of 2000 owing to the drop in the value of the euro in relation to the dollar. No Agency funds were available to cover the gap and it is unlikely any will be available in the future for similar occurrences.

4.13 Staffing is a concern, whether with regard to the physical and emotional safety of employees (especially those in the West Bank and Gaza), social workers with caseloads significantly above the Agency norm or the replacement of senior field and headquarters staff who are retiring. The adjusted salary scale implemented in 1999 is not competitive in local job markets and it has therefore become increasingly difficult for the Agency to hire and retain skilled personnel. It is not unusual for staff to have to do the work of two employees to compensate for staff shortages. It is feared that current trends will lead to further erosion of staff quality, which will in turn impede the ability to effectively deliver programme services.

Resource requirements


Table IV.2
Relief and social services programme resource requirements by activity

(cash and in-kind, in thousands of United States dollars)
Activity
1998-1999 expenditure
2000-2001 appropriation
2002-2003 estimates
Percentage increase
2002-2003 over
2000-2001
Relief services
Special hardship assistance
43 423
51 759
57 618
Eligibility and registration
2 108
2 144
2 474
Subtotal
45 531
53 903
60 092
11.5
Social services
Organizational development of community-based organizations
395
1 112
1 041
Women in development
1 300
1 263
1 156
Disability programme
1 425
1 654
1 798
Youth activities
235
277
289
Poverty alleviation
1 076
1 320
1 267
Subtotal
4 431
5 626
5 551
-1.3
Programme management
6 735
2 913
2 895
-0.6
Total regular budget
56 697
62 442
68 538
9.8
Total project budget
7 718
24 424
26 463



Table IV.3
Relief and social services programme resource requirements by category of expenditure

(cash and in-kind, in thousands of United States dollars)
Category
1998-1999 expenditure
2000-2001 appropriation
2002-2003 estimates
Increase

2002-2003 over

2000-2001

StaffInternational staff
566
636
650
Local staff
11 008
12 068
12 815
Subtotal
11 574
12 704
13 465
761
ServicesTravel
132
171
173
Communication
11
33
30
Transport services
13
18
17
Training
58
134
143
Miscellaneous services
355
404
403
Consultancy services
20
72
77
Subtotal
589
832
843
11
SuppliesClothing supplies
30
16
14
Library books
6
14
11
Fresh food
3
6
5
Miscellaneous supplies
542
286
304
Basic commodities
24 414
27 503
31 720
Subtotal
24 995
27 825
32 054
4 229
Equipment and construction Computer hard/software
87
66
111
Equipment and furniture
122
93
115
Construction
893
137
41
Subtotal
1 102
296
267
-29
PremisesRental of premises
198
234
223
Utilities
26
34
33
Maintenance
0
244
323
Subtotal
224
512
579
67
SubsidiesConstruction subsidies
1 423
1 061
964
Other subsidies
16 790
19 092
20 276
Subtotal
18 213
20 153
21 240
1 087
OtherReserves
0
120
90
Subtotal
0
120
90
-30
Total regular budget
56 697
62 442
68 538
6 096
Total project budget
7 718
24 424
26 463




Budgetary comments

4.14 Tables IV.2 and IV.3 indicate a resource growth in the relief and social services programme of $6.1 million (9.8 per cent) over 2000-2001 appropriations. This increase is explained as follows:

(a) An increase of $4.2 million in basic commodities (received in kind) due to an increase in the number of special hardship cases eligible for food subsidy from 208,850 to 223,725 persons;

(b) An increase of $1.2 million in the cash subsidy in lieu of food commodities due to the increase in the number of special hardship cases;

(c) An increase of $700,000 in local staff costs for 44 additional social worker posts needed to handle the increased load of special hardship cases.


Chapter V
Microfinance and microenterprise programme

Mission

5.1 The mission of the microfinance and microenterprise programme is to improve the quality of life of small and microentrepreneurs, sustain jobs, decrease unemployment and provide income-generating opportunities for poor men and women through the provision of credit.

Structure

5.2 For planning and budgeting purposes, activities of the microfinance and microenterprise programme are divided into the following six subprogrammes:

(a) Small-scale enterprise credit;

(b) Small and microenterprise training (Gaza);

(c) Microenterprise credit;

(d) Solidarity-group lending (Gaza);

(e) Consumer lending (Gaza);

(f) Programme management.

5.3 An Advisory Board composed of senior Agency management and two technical experts (one local and one international) provide assessments, guidance and recommendations for the programme, and a firm of external auditors assists the Agency in monitoring the programme’s compliance with these best practice standards.

Objectives

5.4 The microfinance and microenterprise programme strives to maintain the best practices of the microfinance industry by adhering to the standards established for the industry by such institutions as the Consultative Group for Assistance to the Poor, the United States Agency for International Development, the Microfinance Network, Calmeadow Foundation and Accion International. The programme attempts to achieve international standards of efficiency and outreach in a way that provides cost-effective services for clients in a sustainable manner. Though conditioned by the political and economic situation in the West Bank and Gaza, where the microfinance and microenterprise programme is focused, including a protracted economic decline during the intifada, the Agency continues to pursue its objective of programme development and expansion.

5.5 The small and microenterprise training component of the microfinance and microenterprise programme endeavours to meet the emerging standards for business training and business development services. It covers all the direct costs of training from participants’ fees and meets its overhead and administrative costs from donor contributions.

Constraints and challenges

5.6 The level of risk to the programme’s portfolio is rising as a result of clients becoming delinquent and defaulting on loans owing to the collapse of their markets.

5.7 As the demand for credit has declined, so too has the productivity of the programme’s credit extension agents. Thus, it will take some time at the end of the crisis to rebuild staff morale, productivity and efficiency.

5.8 During the intifada, interest income from lending has declined as demand for credit dropped to 60 per cent of the pre-September 2000 level, while the value of lending fell to only 40 per cent of the previous level. Thus, income flows into the programme dropped while costs have remained constant, resulting in the programme not fully covering its cost for the first time since 1998.

5.9 The programme will have to utilize retained earnings from the previous year to ensure that the programme meets its operational costs in 2001.

5.10 The salary scale created under the 1999 Staff Rules is unappealing; it is almost impossible to attract good quality external candidates for posts of grade 13 or above.

5.11 Developing a regional model for microfinance services that will allow the programme to gradually expand into the Agency’s other areas of operation and to deliver microenterprise credit in a cost-effective and self-sufficient manner, whereby the programme will continue to cover the full cost of operations from credit-generated income.

5.12 Ensuring that the programme’s stakeholders are fully informed and aware of the institutional issues and changes necessary to expand and develop the programme, and that they are fully engaged and committed to them.

5.13 Developing an international/regional network of branch offices and sub-offices that have fully integrated account management and information management systems.

5.14 Refining and restructuring the current organization of programme management to match the requirements of regionalization and branch offices.

5.15 Moving beyond the test-phase of consumer-lending in Gaza, to develop a new consumer-loan product with a unified methodology that has general applicability to the socio-economic conditions of poor Palestine refugees throughout the region.

5.16 Maintaining the human resource capacity and developing the programme’s human capital in times of austerity.

5.17 Developing an in-house training capacity to ensure quality control and an understanding of job functions among credit extension staff and supervisors.

5.18 Identifying, subcontracting or developing a new management information system capable of integrating and unifying the accounting, loan tracking and reporting needs of a regional programme.


Financial resources


Table V.1
Microfinance and microenterprise programme resource requirements by activity

(in thousands of United States dollars)
1998-1999 expenditure
2000-2001 appropriation
2002-2003 estimates
Percentage increase
2002-2003 over
2000-2001
Total recurrent projects a
2 973
3 515
5 066
44.1
Total unfunded projects b
1 462
4 018
4 479
a The recurrent portion of the programme’s budget funded from the programme’s own credit activities.
b Additional project funding required to expand the capital base of the microenterprise credit and small-scale enterprise programmes and for small and microenterprise training activities.


Table V.2
Microfinance and microenterprise programme resource requirements by category of expenditure

(in thousands of United States dollars)
1998-1999 expenditure
2000-2001 appropriation
2002-2003 estimates
Increase
2002-2003
over
2000-2001
StaffInternational staff
294
297
309
Local staff
1 990
2 715
3 971
Subtotal
2 284
3 012
4 280
1 268
ServicesTravel
30
48
64
Communication
17
20
76
Transport services
9
18
41
Training
57
36
50
Miscellaneous services
281
40
81
Consultancy services
24
50
72
Subtotal
418
212
384
172
SuppliesTransportation supplies
4
18
36
Library books
1
2
4
Miscellaneous supplies
23
56
84
Subtotal
28
76
124
48
EquipmentComputer hard/software
11
12
31
Equipment and furniture
18
9
33
Construction
3
0
Subtotal
32
21
64
43
PremisesRental of premises
202
154
166
Utilities
9
14
12
Maintenance
26
36
Subtotal
211
194
214
20
Total recurrent projects a
2 973
3 515
5 066
1 551
Total unfunded projects b
1 462
4 018
4 479
a The recurrent portion of the programme’s budget funded from the programme’s own credit activities.
b Additional project funding required to expand the capital base of the microenterprise credit and small-scale enterprise programmes and for small and microenterprise training activities.

Budgetary comments

5.19 The programme is self-supporting as its running costs are funded by the interest income generated through its lending activities. Income generated is in the region of $2.5 million annually.

5.20 The capital needed for the loans is entirely received from special donor contributions for this purpose.


Chapter VI
Operational and technical services

Mission

6.1 The mission of the Agency’s operational and technical services is to enhance and create synergy in the functions of the Agency’s information systems and its procurement, logistics and construction and engineering services. It is also to direct these services to achieve the best results in terms of efficiency, reliability, and timeliness, hence contributing to the mandate of UNRWA in providing humanitarian assistance for Palestine refugees.

Objectives

6.2 The objective of the Agency’s operational and technical services is to enhance the activities of, and provide support for, the user departments. Operational and technical services will introduce and maintain effective and efficient deployment of information technology support services with better and more reliable access to information and affordable modern information systems technology and a telecommunications infrastructure, and will maintain and improve a cost-effective, reliable, timely procurement, logistical and engineering/design/construction functions at a high standard.

Structure

6.3 For planning and budgeting purposes, the operational and technical services activities are broken down into the following three subprogrammes:

(a) Procurement and logistics;

(b) Information systems;

(c) Engineering and construction services.

Planned activities

6.4 The operational and technical services will procure goods, carry out engineering and construction services and prepare designs, technical instructions and procedures. It will utilize existing information systems, and implement rationalized upgrading of information technology applications and infrastructure within the Agency.

6.5 The operational and technical services will also maintain and manage the inventory of a wide range of goods, including basic commodities, stationery, equipment, computer hardware and software, medical supplies and an extensive variety of general supplies for Agency programmes, administration and management.

6.6 The operational and technical services will manage the Agency’s vehicle fleet, including procurement of vehicles and spare parts, provision of logistical services for the transport of staff and goods within and among the fields, procurement and maintenance of the inventory of spare parts and running workshops for vehicle maintenance within the Agency, and run distribution centres for basic food commodities.

6.7 The operational and technical services will act as the instrument and backbone for introducing, maintaining and modernization of information technology in UNRWA. It will deploy systems and telecommunications infrastructure to enhance user communications facilities and access to information within real time and at reasonable cost. It will also undertake systems development and project implementation in the information technology area, including establishment, provision and updating of hardware, software and telecommunications standards and related instructions of acquisition, distribution, maintenance and support.

6.8 Proper and effective training programmes will be carried out to ensure that staff possess the necessary skills to manage and deliver the required services. The operational and technical services will also review its human resource needs to better serve users.

Constraints and challenges

6.9 A major challenge facing the operational technical services of the Agency is improving user access to information Agency-wide in terms of scope of information accessed, number of staff with access rights, security, speed and reliability of access. The major vehicles for carrying out this task are the local area networks (LANs) and the satellite wide area network (SWAN) infrastructure. These vehicles will need continuous streamlining and improvements, particularly in view of the recent reforms in finance and payroll, resulting in an expansion of information technology services, hence requiring substantial acquisition of the information technology infrastructure, hardware and software. These needs cannot be readily met from the Agency’ s General Fund.

6.10 Another major challenge is to deliver good quality services and goods at a reasonable cost by enhancing competitiveness, stabilizing prices and improving sourcing and pre-qualification of suppliers as well as follow-up and contract administration activities. The Agency’s increasing difficulty in retaining and recruiting trained staff as a result of the 1999 Area Staff pay scales will limit the Agency’s ability to stay abreast of new operational and technical developments, and will negatively affect institutional expertise.

6.11 Owing to shortfalls in the General Fund budget, the Agency had no choice but to resort to a maintenance mode for the existing infrastructure and applications in the information technology domain, structures and vehicles and equipment. Much of the Agency’s information technology infrastructure has not been updated to match the level of increase in the demand for information technology services. Likewise, the conditions of premises and structures have deteriorated to such an extent that replacement is warranted earlier than normal, resulting in higher total costs. In addition, replacement of vehicles has not been carried out in accordance with the established guidelines within the Agency. This situation has resulted in higher maintenance costs for the existing fleet of vehicles and equipment, and has required that the budget for replacement of vehicles be substantially increased in the 2002-2003 budget.

6.12 An important constraint that is out of the Agency’s control is the prevailing political situation in West Bank and Gaza. If the crisis continues, not only will it impede the Agency’s ability to deliver certain services on time but it will also increase the cost of delivery of those services.

6.13 The delivery of Agency services is negatively impacted by having to operate under differing host Government rules and regulations. This has often resulted in higher costs to the Agency in order to meet certain local specifications or regulations. These varying regulations promulgated by the host countries often compromise movement of goods, people, supplies and delivery times.

Resource requirements


Table VI.1
Operational and technical service resource requirements by activity

(cash and in-kind, in thousands of United States dollars)
1998-1999 expenditure
2000-2001 appropriation
2002-2003 estimates
Percentage
increase
2002-2003 over
2000-2001
Procurement and logistics services
18 433
24 531
27 192
10.8
Engineering and construction services
9 810
5 929
6 386
7.7
Information systems
3 827
5 327
5 361
0.6
Management
0
0
496
Total regular budget
32 070
35 787
39 435
10.2
Total project budget
2 039
503
300




Table VI.2
Operational and technical service resource requirements by category of expenditure

(cash and in-kind, in thousands of United States dollars)
1998-1999 expenditure
2000-2001 appropriation
2002-2003 estimates
Increase 2002-2003
over 2000-2001
StaffInternational staff
5 959
5 386
5 680
Local staff
17 759
18 507
19 104
Subtotal
23 718
23 893
24 784
891
ServicesTravel
206
311
395
Communication
27
76
722
Transport services
1 807
2 779
2 600
Training
54
162
241
Miscellaneous services
5 036
1 955
1 347
Consultancy services
144
218
364
Subtotal
7 274
5 501
5 669
168
SuppliesMedical supplies
-267
0
0
Transportation supplies
1 006
1 691
2 243
Clothing supplies
-99
16
17
Textbooks and library books
8
27
39
Miscellaneous supplies
-23
579
533
Basic commodities
-2 052
0
0
Subtotal
-1 427
2 313
2 832
519
Equipment and construction Computer hard/software
677
1 068
1 145
Equipment and furniture
165
413
601
Transport equipment
1 120
1 304
2 978
Construction
407
44
94
Subtotal
2 369
2 829
4 818
1 989
PremisesRental of premises
39
62
59
Utilities
94
97
123
Maintenance
0
592
632
Subtotal
133
751
814
63
Subsidies
3
0
0
0
OtherReserves
0
500
518
Subtotal
0
500
518
18
Total regular budget
32 070
35 787
39 435
3 648
Total project budget
2 039
503
300
(203)


Budgetary comments

6.14 Tables VI.1 and VI.2 show a resource growth of $3.6 million in operational and technical services (10.2 per cent) over 2000-2001 appropriations. This growth is attributed to the following:

(a) An increase of $1.7 million in transport equipment to replace 109 old vehicles long overdue for replacement. The Agency’s fleet consists of 762 vehicles;

(b) An increase of $900,000 in staff costs due to the following:


(c) An increase of $500,000 in transport supplies due to increase in fuel prices;

(d) An increase of $900,000 in communications equipment and services due to the installation of the Satellite Wide Area Network (SWAN);

(e) A decrease of $400,000 in transport and other services due to recovery of costs from donors and users.


Chapter VII
Common services

Mission

7.1 The mission of the Agency’s common services is to secure the highest standards of efficiency, competence and integrity in carrying out the UNRWA humanitarian mandate deriving from the relevant General Assembly resolutions, in providing leadership for the Agency’s programmes and fields, and in managing the Agency’s human and financial resources.

Structure

7.2 The work of common services comprises overall Agency management and policy guidance, legal advice, fund-raising, public information and liaison, financial and human resources management, and audit and inspection. Common services are distinct from the UNRWA operational services, which stem directly from programme activities in the five fields, in that they facilitate management decision-making and Agency administration, and provide the Agency’s link to the international community. For planning and budgeting purposes, common services activities are broken down into the following nine offices:

(a) Office of the Commissioner-General;

(b) Legal services;

(c) Audit and inspection;

(d) External relations;

(e) Public information;

(f) Policy analysis;

(g) New York and Geneva liaison offices;

(h) Administration and human resources;


7.3 The detailed plans of work for these offices are outlined in the following pages.

Constraints and challenges

7.4 As is the case with Agency programmes, resource constraints pose an obstacle to the capacity of the Agency’s common services to recruit and retain qualified personnel. Recent trends reveal an increased rate of separation from UNRWA by both international and area staff who move to other multinational organizations with higher pay scales.

7.5 Unrest in the West Bank and Gaza presents a continuing direct and indirect cost to the Agency. Fee collection on Agency humanitarian goods and restrictions on the movement of area staff within the West Bank and Gaza have resulted in financial losses. The Agency has already suffered considerable delays in its implementation of the new payroll and financial management system as a partial consequence of the situation. Strife in these areas also complicates efforts to recruit staff.

Resource requirements

Table VII.1
Common services resource requirements by activity

(cash and in-kind, in thousands of United States dollars)
1998-1999 expenditure
2000-2001 appropriation
2002-2003 estimates
Percentage increase
2002-2003
over
2000-2001
General management
Office of the Commissioner-General
2 596
2 689
2 330
Legal services
1 773
2 421
2 549
Audit services
1 676
1 800
1 877
External relations
1 826
2 034
2 236
Public information
973
1 493
1 554
Policy analysis unit
597
940
1 317
New York liaison office
629
620
636
Administration and human resources
27 168
29 958
35 466
Financial services
6 085
7 025
8 938
Total regular budget (excl. reserves)
43 323
48 980
56 903
16.2
General reserves
Working capital requirements
14 000
14 000
Salary increase requirements
12 000
15 000
Contingency reserve
2 000
2 000
Subtotal
0
28 000
31 000
Total regular budget
43 323
76 980
87 903
Total project budget
391
300
706



Table VII.2
Common services resource requirements by category of expenditure

(cash and in-kind, in thousands of United States dollars)
1998-1999 expenditure
2000-2001 appropriation
2002-2003 estimates
Increase
2002-2003 over
2000-2001
StaffInternational staff
17 850
18 969
21 783
Local staff
17 651
19 994
23 478
Subtotal
35 501
38 963
45 261
6 298
ServicesTravel
647
1 282
1 057
Communication
1 776
1 558
1 371
Transport services
167
194
23
Training
127
368
1 373
Miscellaneous services
1 572
1 933
2 407
Consultancy services
327
519
481
Subtotal
4 616
5 854
6 712
858
SuppliesTransportation supplies
31
31
30
Clothing supplies
17
16
14
Library books
32
51
58
Miscellaneous supplies
764
951
1 030
Supplies for public information office
21
12
7
Subtotal
865
1 061
1 139
78
Equipment and constructionComputer Hard/software
360
161
354
Equipment and furniture
411
382
587
Construction
272
-10
7
Subtotal
1 043
533
948
415
PremisesRental of premises
485
633
503
Utilities
786
882
897
Maintenance
960
1 022
Subtotal
1 271
2 475
2 422
-53
Grants and subsidies
27
85
85
0
OtherReserves
0
28 009
31 336
Subtotal
0
28 009
31 336
3 327
Total regular budget
43 323
76 980
87 903
10 923
Total project budget
391
300
706

Budgetary comments

7.6 Tables VII.1 and VII.2 show a resource growth of $7.9 million in common services (16.2 per cent) over 2000-2001 appropriations. This growth is attributed to the following:

(a) An increase of $2.8 million in international staff costs broken down as follows:


(b) An increase of $3.4 million in local staff costs:
(c) The inclusion of a training reserve of $1.0 million for minimum staff training requirements;

(d) An increase of $400,000 for replacement of unserviceable equipment and upgrading of computer equipment;

(e) The inclusion of $300,000 for operational reserves (allocable eventually to programmes) under common services.

Notes

1 World Health Organization, World Health Report 2000 , Annex table 8: selected national health accounts indicators for all Member States, estimates for 1997 (Geneva, 2000).




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