tions, I am submitting to the Council my estimates of the administrative expenses and receipts for the year 1944 and the unelapsed part of the year 1943. By Council action, the Ad Hoc Subcommittee on the Administrative Budget is the appropriate body of the Council to receive and consider these estimates. The Expenditures and Receipts are each estimated, for the period ending December 31st, 1944, at $10,000,000. The estimate of $10,000,000 required for administrative expenditures is subdivided as follows: For Salaries and Other Personal Services: For headquarters, regional offices, committee staffs, and other For field missions . . Total Salaries and Personal Service . For Expenditures Other Than Salaries and Personal Service, Including: Living quarters, post and representation allowances, travel, communication, administrative supplies and equipment, other contractual services, and general expense $4,800,000 4, 000, 000 $8, 800, 000 $3,000, 000 Total Personal and Other Than Personal Service . . . $11, 800, 000 Less Anticipated Accruals From Non-expenditure-30% of Above . Undistributed Appropriation to Meet Contingencies Total Estimated Expenditures . 10, 000, 000 Estimated Receipts From Contributions From Member Governments. $10, 000, 000 The Council will not have supposed that I should be able at this time to present a budget based upon a definite pattern of organization, nor would it have desired me to do so. Even in respect to the administrative organization (as distinguished from field missions), it is evident that the pattern of organization must wait upon the completion of the work of this first session of the Council, and then upon the analysis of the activities to be undertaken by the Director General, the regional offices and various committees, and upon discussion of the most efficient organization with representative members of the Council and others. While I expect to begin assembly of a staff immediately, I shall not determine the final form of the administrative organization until I shall have had time fully to analyze all the actions of the first session of the Council. From an examination of the tasks which must be undertaken by that part of the administrative organization which is responsible for executive activities, for programming, for arrangements for procurement and for accounting, audit, services as secretariat to the Council, and for all the other non-field services which are required for an or ganization of this kind, it is evident that within the next few months a substantial number of employees will be required. Some of these employees will be in Washington, some in a European office, some in a Far Eastern office and some in other places, such as for example, Cairo. I cannot yet determine the relative needs of such offices. Because of the size of the task which lies ahead of the Administration, the urgency of its mission, and the fact that in substantial measure its work will be that of coordination, it must secure the most competent employees possible, and it will be necessary to pay them adequate salaries related to this high degree of competence. I estimate that the cost of compensation for these employees on an annual basis will amount to approximately $4,800,000. For the field missions to be established during the year 1944 it will likewise be necessary to attract persons of outstanding ability and pay them commensurately. It is obvious that no definite forecast of the number of missions, or their size, or the time when they will commence to operate is possible at the present time. I have assumed that the missions would vary greatly in size, ranging from perhaps not more than ten persons in areas where an existing government is prepared to assume all administration of relief and rehabilitation, to as many as 250 persons in areas where the government desires more assistance in the organization of relief and rehabilitation activities during a period of disorganization following reoccupation of the territory. I am aware of the desire of some governments for technical personnel in considerably larger numbers than those mentioned, and I shall do my utmost to be of the greatest possible assistance in that connection. But I believe that where such technical personnel is furnished to the government of a liberated area to engage directly in relief and rehabilitation activities as distinguished from administrative supervision-the charge for salaries is properly an operating expenditure and not to be charged to the administrative budget. The figures given, therefore, are not to be read as an indication that such technical personnel will not be made available. That question remains for future decision in the light of circumstances as they develop, and the requests and needs of the different governments. For the field mission employees, I believe that an estimate of $4,000,000 for salaries and personal service is a reasonable figure. Although I can make no final commitment, I would expect that UNRRA employment, apart from field missions, is unlikely to increase after 1944. On the other hand, at the peak of operation the staffs of the field missions may well be much larger than the number needed in 1944. Exactly how much larger no one can tell. In addition to salaries for personnel, there must necessarily be very substantial items of expenditure. Those persons who are assigned to work far from their homes and away from their families must in many cases be given an added allowance to compensate them for the extra cost of maintaining their regular homes and maintaining themselves in a foreign post, sometimes under expensive conditions. This is a recognized practice of government. The cost of travel will undoubtedly be heavy because of the vast distances over which the Administration must operate. The cost of communications will likewise be heavy because of the need for constant interchange of cabled information. The estimate of expenditures for supplies and equipment, for other contractual services and for general expense is based upon normal government experience. For these items I have estimated a total expenditure of $3,000,000 until the end of 1944. In fixing this sum I have taken a very conservative figure, in light of the expenditures of United States public agencies engaged in similar activities, but I believe that a determined effort at economy will make it possible to keep within the figure. The total personal and other than personal service estimate is $11,800,000. This figure is on an annual basis, assuming full service of all personnel for a full year. It is obvious that the total personnel will not be employed for the full year. Even as to the selection of the administrative personnel, it will take time to find the right people for the right places, and a certain amount of the annual salary will remain unspent because some individuals will not go on the payroll until well after January first. In respect to the field missions, there will be a larger difference between full annual salaries and actual expenditures because many of the missions will not commence to operate until well into the year 1944. Similarly, because the Administration will not be engaged in its full scope of activity in its early months of existence, expenses for other than personal services will be less than would be required for full operation for the entire year. I estimate that on an overall basis, 30 per cent of the estimated full annual amount will remain unspent, and I have, therefore, deducted from the estimate the amount of $3,540,000, leaving a net of $8,260,000 as the estimate of the total planned expenditures. But it will also be evident to the members of the Council that in an operation of this character, there must be provision to meet very substantial expenditures for activities the exact nature, location and time of which we cannot now foresee, but which are bound to develop. Indeed, throughout the life of the Administration I anticipate that we shall meet constantly the unexpected, and we must always make adequate provision for it. Obviously, it is impossible to make any accurate estimate of the amount which should be reserved for those unplanned activities but, in order to have a sufficient provision, I have requested this provision in the amount of $1,740,000 to be available to the Director General to meet contingencies as they arise. If the amount is not needed, it will not be spent. If it is needed, the need will be urgent and the money must be available. Accordingly, the total amount of the budget, approval of which is requested by the Council for the year 1944 and for the unelapsed part of the year 1943, is $10,000,000. Estimate of Receipts Under Article VI of the Agreement provision is made that— Upon approval of a budget by the Council the total amount approved shall be allocated to the member governments in proportions to be determined by the Council. Each member government undertakes, subject to the requirements of its constitutional procedure, to contribute to the Administration promptly its share of the administrative expenses so determined. The subcommittee on the administrative budget has proposed an allocation of administrative expenses among the 44 member nations of the Administration. The financial plan approved by the Subcommittee on Finance provides that the share of administrative expenses allocated to each member government may be included by the government in its general contributions for participation in the work of the Administration. Under the allocations approved by the Subcommittee on the Administrative Budget, the smallest contribution from any member government will be $5,000, and the largest contribution will be $4,000,000, if the Council shall approve my request for a $10,000,000 budget. I have based my estimates of receipts to meet administrative expenses upon the assumption that every member government will contribute to UNRRA at least the amount of its allocation for administrative expenses. Form of Appropriation In view of the lack of experience with administrative expenditures for UNRRA, it would be desirable to have the greatest possible flexibility in the use of the appropriation voted by the Council. Indeed I am not certain that the experience during any year of the life of UNRRA will ever be a very good guide as to what may be expected in the next. The most effective use of the administrative appropriation will be possible if it is voted as a lump sum, subject to allocation at the discretion of the Director General in the light of circumstances as they develop. In other words, while I have indicated the amount which I presently believe will be required for salaries for administrative personnel, for field personnel, for other than personal service, and for contingencies, developments may show that more is needed for one purpose and less for another, and it would be helpful if an appropriation of the Council might be for a single sum of $10,000,000. Control of Administrative Expenditures The regulations approved by the Subcommittee on the Administrative Budget provide for the establishment and maintenance of accounts under the direction of the Director General. As soon as the Council shall approve a budget, the Director General will establish the necessary accounting system and will also promulgate appropriate regulations designating the officials and determining the procedures under which expenditures of administrative funds may be authorized or made. I am deeply conscious of the fact as head of the United Nations Relief and Rehabilitation Administration, charged with the relief of human misery and suffering throughout the world, I must make every effort to assure the wise and economical use of the Administration's resources. I give to the Council my assurance that no expenditure will be made from the sum which it may approve for administrative expenses except where such expenditure is necessary, and where it contributes to the ultimate purpose of the Administration-the relief and rehabilitation of the victims of war who have suffered so tragically from enemy plunder and exploitation. Respectfully submitted, HERBERT H. LEHMAN |