Summary
The United Nations (U.N.) estimates that its planned renovation of the seven buildings on the Headquarters complex could cost almost $1.2 billion. As the host country and the largest contributor to the United Nations, the United States has a significant interest in this project. This report (1) assesses the reasonableness of the U.N. process to develop the renovation plans, (2) analyzes the potential cost to the United States, (3) identifies critical milestones before construction can begin, and (4) discusses efforts to monitor and oversee the project.
U.N. officials followed a reasonable process consistent with leading industry practices and recognized guidelines in developing the headquarters renovation plan--the first phase of a five-phase renovation process. As the project advances, changes in scope, schedule, and cost are to be expected. To finance the renovation, the Secretary-General anticipates a no-interest loan from the United States. However, U.S. and U.N. officials stated that neither the United States nor the United Nations have specified the nature of any financing commitment. GAO estimates that the financial impact of the renovation to the federal government, including providing a $1.2 billion no-interest loan and repaying a share as a U.N. member, would be over $700 million, depending on the loan terms and conditions. Several critical milestones must be met for construction to begin as planned, including securing a financing commitment and signing a lease for a building where U.N. staff and delegates would relocate during the renovation. As the renovation project progresses, additional management, oversight, and monitoring is needed. The United Nations plans to complete a project management plan, which would help the United Nations control cost and schedule. While the United Nations has approved initial funding for the Board of Auditors to conduct oversight of the renovation and the board is preparing its audit strategy, the Office of Internal Oversight Services does not have the resources or audit strategies needed to effectively conduct oversight of the renovation. The Department of State has assembled a task force to monitor the renovation, but the department will need to define the task force's mission and program goals. Doing so would allow the department to develop strategies for employing the appropriate skill mix needed to achieve a successful outcome for the task force.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change
from "In process" to "Implemented" or "Not implemented" based on our follow up work.
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Recommendations for Executive Action
Recommendation: The Secretary of State, in consultation with appropriate administration officials and other U.N. members, should direct the U.S. representative to the United Nations to encourage the United Nations to complete and implement an effective project management plan that will guide decision making and coordination throughout the renovation project.
Agency Affected: Department of State
Status: Implemented
Comments: In May 2003, (United Nations: Early Renovation Planning Reasonable, but Additional Management Controls and Oversight Will be Needed GAO-03-566) we recommended that the Secretary of State, in consultation with appropriate administration officials and other UN members, direct the U.S. representative to the UN to (1) encourage the UN to complete and implement an effective project management plan that will guide decision making and coordination throughout the renovation project, and (2) encourage the UN to provide the Office of Internal Oversight and the Board of Auditors with the resources needed to conduct effective oversight of the Capital Master Plan as the project progresses. In addition, we recommended that State define the mission and program goals of the task force monitoring U.S. participation in the Plan. Also that State determine the expertise the task force needs to fulfill its role and ensure that it has the resources necessary to monitor the project over its duration. In response to the recommendations in this report, according to agency officials, the UN hired a project management firm to develop a management plan that was completed by November 2005 to guide decision making and coordination for the UN's headquarters renovation project. As part of a subsequent engagement on UN renovation planning, in February 2006, we reviewed the project management binder and verified that it exists.
Recommendation: The Secretary of State, in consultation with appropriate administration officials and other U.N. members, should direct the U.S. representative to the United Nations to encourage the United Nations to provide the Office of Internal Oversight and the Board of Auditors with the resources needed to conduct effective oversight of the Capital Master Plan as the project progresses.
Agency Affected: Department of State
Status: Implemented
Comments: In May 2003, (United Nations: Early Renovation Planning Reasonable, but Additional Management Controls and Oversight Will be Needed GAO-03-566) we recommended that the Secretary of State, in consultation with appropriate administration officials and other UN members, direct the U.S. representative to the UN to (1) encourage the UN to complete and implement an effective project management plan that will guide decision making and coordination throughout the renovation project, and (2) encourage the UN to provide the Office of Internal Oversight and the Board of Auditors with the resources needed to conduct effective oversight of the Capital Master Plan as the project progresses. In addition, we recommended that State define the mission and program goals of the task force monitoring U.S. participation in the Plan. Also that State determine the expertise the task force needs to fulfill its role and ensure that it has the resources necessary to monitor the project over its duration. During the course of a subsequent engagement on UN renovation planning, we reviewed the activities of OIOS and the UN Board of auditors. Officials in both organizations indicated to us in February 2006 that they each had been budgeted sufficient funds to conduct their work during the preceding three years (2003-2006), per our recommendation.
Recommendation: In addition, to ensure that U.S. interests are effectively represented as the United Nations proceeds through the design phase, the Secretary of State should define the mission and program goals of the task force currently monitoring U.S. participation in the Capital Master Plan.
Agency Affected: Department of State
Status: Implemented
Comments: In May 2003, (United Nations: Early Renovation Planning Reasonable, but Additional Management Controls and Oversight Will be Needed GAO-03-566) we recommended that the Secretary of State, in consultation with appropriate administration officials and other UN members, direct the U.S. representative to the UN to (1) encourage the UN to complete and implement an effective project management plan that will guide decision making and coordination throughout the renovation project, and (2) encourage the UN to provide the Office of Internal Oversight and the Board of Auditors with the resources needed to conduct effective oversight of the Capital Master Plan as the project progresses. In addition, we recommended that State define the mission and program goals of the task force monitoring U.S. participation in the Plan. Also that State determine the expertise the task force needs to fulfill its role and ensure that it has the resources necessary to monitor the project over its duration. In response to the recommendations in this report, according to an agency official in February 2006, the Department of State developed a Mission Statement for its task force that monitors U.S. participation in the Capital Master Plan.
Recommendation: The Secretary should also determine the expertise the task force needs to fulfill its role and ensure that it has the resources necessary to monitor the project over its duration.
Agency Affected: Department of State
Status: Implemented
Comments: In May 2003, (United Nations: Early Renovation Planning Reasonable, but Additional Management Controls and Oversight Will be Needed GAO-03-566) we recommended that the Secretary of State, in consultation with appropriate administration officials and other UN members, direct the U.S. representative to the UN to (1) encourage the UN to complete and implement an effective project management plan that will guide decision making and coordination throughout the renovation project, and (2) encourage the UN to provide the Office of Internal Oversight and the Board of Auditors with the resources needed to conduct effective oversight of the Capital Master Plan as the project progresses. In addition, we recommended that State define the mission and program goals of the task force monitoring U.S. participation in the Plan. Also that State determine the expertise the task force needs to fulfill its role and ensure that it has the resources necessary to monitor the project over its duration. Per our recommendation, according to an agency official in February 2006, the Department of State's Mission Statement for its task force that monitors U.S. participation in the Capital Master Plan indicates the permanent members of the task force and allows for additional members as other types of expertise are needed.
