The General Accounting Office criticized the financial management of United Nations organizations yesterday, but defended their practice of keeping large sums of money in bank accounts.
J. Kenneth, Fasick, director of the GAO's international division, told two House subcommittees that "major problem areas include the (U.N.) organizations' structure, financial management, and budgeting and programming.
The subcommittees held hearings yesterday in response to recent Washington Post articles that reported that U.N. organizations run an annual surplus of as much as$350 million and keep $1.4 billion in bank accounts around the world.
Fasick said that since much of this additional money is committed for future projects, it is misleading to consider U.N. organizations wealthy or assured of stable finances.
Rep. Don L. Bonker (D. Wash.), chairman of the House Foreign Affairs international organizations subcommittee, said he was not entirely satisfied that yesterday's testimony before his subcommittee and before the international operations subcommittee answered all the points raised by the newspaper articles.
"The U.N. system is terribly complex and probably anachro nistic in its financial systems" Bonker said. He said he plans future inquiries into United Nations finances.
Fasick said yesterday that he agrees the United Nations has a "deficit" because some countries have refused to pay their assessed contributions.
The Post articles quoted the American Institute of Certified Public Accountants as saying a deficit is an excess of expenses over income and has nothing to do with a failure to collect contributions.
Joseph Donlon, assistant director for financial management at the GAO division that sets acounting standards for the government, also said yesterday that a deficit is an excess of expenses over revenue.
When evaluating whether U.N. organizations have excess cash, Fasick said, bills owed by them, as well as bills owned to them, should be considered.
When such bills are considered, the surpluses of U.N. organizations often appear higher than the bank account figures cited in the Post articles.
The United Nations Children's Fund (UNICEF), for example, had $131 million in the bank at the end of 1977, its audited financial statements show. Its assets, including bills owed to it, were $185 million, and its liabilities, including bills it owes, were only $40 million. This left net assets of $145 million.
Fasick, in his testimony, said, "Clear weaknesses exist in the United Nations' management of its organizations."
He said U.N. groups have been studying ways of centralizing some activities of U.N. organizations. "Yet," he said, "specialized agencies (within the U.N. system) still tend to favor their autonomy, and few are willing to accept a central mechanism to coordinate planning and programming."
Although the U.N.'s controller is practices within the U.N. system, he authorized to coordinate financial said, he has not exercised it. Fasick said the controller, Helmut Debatin, has stated that the various governing bodies of U.N. organizations are more influential than he is.
Fasick called for more aggressive action by the State Department in trying to restructure the U.N. system, and said the department should scrutinize U.N. organization budgets more closely.
Marion V. Creekmore, deputy assistant secretary of state, said any totaling of cash in U.N. organization bank accounts produces a "misleading and irrelevant" figure because each organization is separate. Trust fund money also should be excluded, he said.
The Post articles listed trust fund money separately.
Creekmore said U.N. organizations need more money in the bank than commercial companies because their members generally do not want them to borrow.
He said the State Department takes "seriously" the charge that U.N. organizations do not earn the highest possible interest on its cash balances.
However, he said, the organizations often have hundreds of accounts in different countries with varying banking practieces.
Some countries place restrictions on where their funds will be invested until it is needed, he said. The United States itself only advances contributions to some U.N. organizations when it is required, he said.
"I would not pretend that the U.N. financial management system is perfect," he said. "But the system is better than its critics acknowledge, and improvements are being made." CAPTION: Picture, Dante Fascell, left, and Don L. Bonker head House hearings on U.N. finances. By James K. W. Atherton - The Washington Post