U.N. chief warns staff, member states: We're running out of cash

By Michelle Nichols

UNITED NATIONS (Reuters) - United Nations chief Antonio Guterres has warned staff that the world body is running out of cash and urged member states to pay what they owe as soon as possible, according to letters seen by Reuters on Thursday.

Guterres said in a letter sent to member states on Wednesday that as of June 30, the core U.N. budget had a deficit of $139 million and the United Nations had "never faced such a difficult cash flow situation this early in the calendar year."

"An organization such as ours should not have to suffer repeated brushes with bankruptcy. But surely, the greater pain is felt by those we serve when we cannot, for want of modest funds, answer their call for help," Guterres wrote.

The U.N General Assembly budget committee agreed in December on a $5.4 billion core U.N. budget for 2018-2019, which U.S. Ambassador Nikki Haley said was a cut of $285 million from 2016-2017. U.N. peacekeeping is funded separately.

According to the United Nations, 112 out of 193 member states have so far paid their share of the core budget. The United States, which is responsible for 22 percent of the budget, traditionally pays later because of its budget year.

By July last year, 116 countries had paid, compared with 98 in 2016. China, France, Russia and Britain - the permanent members of the U.N. Security Council along with the United States - are all paid up for 2018.

Guterres told staff he was concerned with a broader trend: "We are running out of cash sooner and staying in the red longer." He said the United Nations would take measures to reduce expenses with a focus on non-staff costs.

Haley came to the United Nations in January last year pushing for reform of the world body in a bid to cut costs.

"The inefficiency and overspending of the United Nations are well known. We will no longer let the generosity of the American people be taken advantage of or remain unchecked," she said in December, when the core budget was agreed.

Under U.N. rules, if a country is in arrears in an amount that equals or exceeds the contributions due for the previous two years, it can lose its General Assembly vote unless the country can show its inability to pay is beyond its control.

Currently Comoros, Guinea Bissau, Sao Tome and Principe and Somalia are significantly in arrears but have been allowed to retain their vote. Only Libya is unable to vote.

(Reporting by Michelle Nichols; Editing by Steve Orlofsky)