Internal Audit in the Office of the United Nations High Commissioner for Refugees ( )

Transcription

1 United Nations General Assembly Distr.: General 12 July 2011 English Original: English A/AC.96/1101 Executive Committee of the High Commissioner s Programme Sixty-second session Geneva, 3-7 October 2011 Item 5 (b) of the provisional agenda Consideration of reports on the work of the Standing Committee Programme budgets, management, financial control and administrative oversight Internal Audit in the Office of the United Nations High Commissioner for Refugees ( ) Report by the Office of Internal Oversight Services Summary This report provides an overview of the internal audit activities undertaken by the Office of Internal Oversight Services (OIOS), Internal Audit Division (IAD), in respect of the Office of the United Nations High Commissioner for Refugees (UNHCR), covering the period 1 July 2010 to 30 June GE

2 Contents Chapter Paragraphs Page I. Introduction II. Audit arrangements A. Planning, reporting and monitoring B. Staffing and funding C. Cooperation and coordination D. Advisory services III. Overview of results A. Audit coverage B. Strategic management and governance C. Programme and project management D. Supply chain management E. Financial management F. Human resources management G. Information and communications technology (ICT) management H. Safety and security IV. Status of recommendations implementation A. Implementation rate B. Recommendations over two years old Annexes I. Status of assignments planned for the period 1 July 2010 to 30 June II. Final reports issued during the period 1 July 2010 to 30 June III. Reports in process of finalization with UNHCR as of 30 June IV. Recommendations open for more than two years

3 I. Introduction 1. The Office of Internal Oversight Services (OIOS) was established by General Assembly resolution 48/218B, dated 29 July 1994, to enhance oversight in the United Nations. Operationally independent, the role of OIOS is to assist the Secretary-General in fulfilling his internal oversight responsibilities in respect of the resources and staff of the United Nations through internal audit, monitoring, inspection, evaluation and investigation. 2. The Internal Audit Division of OIOS (OIOS/IAD) provides internal audit services to the Office of the United Nations High Commissioner for Refugees (UNHCR) under the provisions of Article 12 of the UNHCR Financial Rules for Voluntary Funds. The article states that all financial transactions and related activities covered by these rules shall be subject to audit by the UNHCR Audit Section of OIOS/IAD and by the United Nations Board of Auditors. Chapter 4 of the UNHCR Manual also has a section on OIOS/IAD s work, which is to assist the High Commissioner in fulfilling his management functions as well as to function as an oversight mechanism, providing reasonable assurance that UNHCR s resources are used properly. 3. A Memorandum of Understanding (MOU) between UNHCR and OIOS defines the arrangements for internal audit services to be provided by OIOS/IAD to UNHCR. The first MOU was signed in April The MOU has been revisited at regular intervals to ensure that the services provided remain in line with UNHCR needs. At the request of UNHCR a revised MOU was submitted in June 2009, to which OIOS has not yet had a formal response. 4. The present report provides an overview of OIOS/IAD activities during the period 1 July 2010 to 30 June It is submitted in conformity with the MOU, where it was agreed that, in consultation with the High Commissioner, OIOS/IAD would prepare an annual report on internal audit activities for submission to the Executive Committee. II. Audit arrangements A. Planning, reporting and monitoring Planning and reporting 5. An annual risk-based plan, covering the period from January to December, was prepared in accordance with the planning process agreed with UNHCR. OIOS/IAD identified high and medium-risk assignments and held discussions with UNHCR management to confirm the assignments identified. The draft plan was discussed with the UNHCR Oversight Committee, the Board of Auditors (BOA), reviewed by OIOS management, and approved as part of the OIOS work plan for the year. No issues were noted in the planning process for 2010 and 2011 work plans covered by this annual report. 6. In accordance with the International Standards for the Professional Practice of Internal Auditing, OIOS/IAD updates its risk assessment of UNHCR on an ongoing basis, as a result of audits conducted and changes in UNHCR s internal and external environment. During this reporting period, OIOS/IAD made changes to its reporting template to make greater use of risk language and in the second quarter of 2011, further changes have been made to provide assurance on controls tested, as requested by UNHCR management. 3

4 Monitoring 7. OIOS/IAD provided the UNHCR Audit Coordination Unit with a monthly status report on work plan progress, which was forwarded to UNHCR management and the UNHCR Oversight Committee. UNHCR and OIOS/IAD management reviewed and approved all work plan changes in the year, which generally arose in response to emerging risks, resource constraints, and in order to minimize duplication of the work of other oversight bodies. During the period, 24 assignments were planned to start with, and there were five additions and three cancellations. The status of the planned assignments as at 30 June 2011 is shown in Annex I. 8. OIOS/IAD has a Professional Practices Section, which is responsible for the internal quality assurance and improvement programme. This section designs the templates and methodologies under which the OIOS/IAD audits are carried out. As part of this process, they reviewed all reports issued to UNHCR. B. Staffing and funding Staffing 9. There were no changes in the staffing arrangements in the reporting period, which are shown in Table 1, with staff in post as at 30 June 2011 shown in Table 2. Table 1: Number and type of approved posts for 2010 and 2011 Resident Auditors Geneva Nairobi Pakistan, Syrian Arab Republic, Sri Lanka and Senegal Total Professional General Service Table 2: Staff in post as at 30 June 2011 Resident Auditors Geneva Nairobi Pakistan, Syrian Arab Republic, Sri Lanka and Senegal Total Professional General Service Vacancies remained an area of concern for both OIOS/IAD and UNHCR. The vacancy rate throughout the reporting period was around 40 per cent. As reported last year, OIOS recruitments are handled through the United Nations Secretariat recruitment system and problems with the system meant that OIOS was unable to launch vacancies until the first quarter of Recruitment is in the process of finalization for seven of the eight vacant posts, and the target is to have recruitment finalized for all eight posts by the end of

5 11. To mitigate the effect of the vacancies, and to add value to the audit resources funded by UNHCR, the resources below were provided by OIOS: Funding Three General Service staff dealing with administration and audit support. The OIOS/IAD Information and Communications Technology (ICT) Audit Section supported the Information and Communications Technology (ICT) audits conducted in the reporting period. OIOS/IAD Professional Practices and the Special Assignments Sections provided advice to audit teams throughout the audit process, and performed quality control. 12. As requested by UNHCR, the budget remained unchanged for 2010 and 2011 at around $4.2 million per annum. The budget approved by UNHCR did not impede the conduct of work in the reporting period because of the vacancy rate. C. Cooperation and coordination UNHCR Oversight Committee 13. OIOS/IAD attended Oversight Committee meetings held during the reporting period, to provide updates on work progress, and to present the draft annual plan. UNHCR Management 14. OIOS/IAD was not invited to any senior management meetings but did meet with Directors of Divisions/Regions, the Deputy High Commissioner and attended Oversight Committee meetings. External audit - Board of Auditors (BOA) 15. OIOS held quarterly meetings with BOA to coordinate activities. Through these meetings, the audit plan was reviewed and adjusted to minimize duplication of visits and maximize audit coverage. 16. In the course of the reporting period, the British external auditors team took over from the French team. The incoming auditors held meetings with OIOS/IAD to discuss work planning and coverage. UNHCR has requested closer coordination between OIOS/IAD and BOA on high-risk programmatic areas identified by BOA. OIOS will discuss this with BOA in the preparation of the 2012 work plan, along with ways to improve coordination on planning and discussion of results of the work carried out. Inspector General s Office (IGO) 17. During the reporting period, IGO and OIOS/IAD strengthened their coordination to minimize duplication and ensure adequate coverage of UNHCR s activities. Regular bi-monthly meetings to discuss ongoing and future work took place. As a consequence of these discussions, staff of IGO and OIOS/IAD work more closely together during the planning phase of assignments. Audit focal point and coordination unit 18. During the reporting period, the Controller was the focal point for OIOS/IAD, and monthly meetings were held with the Audit Coordination Unit, located in the Controller s office, to discuss work plan issues. 5

6 Client satisfaction survey 19. OIOS/IAD conducts an annual satisfaction survey of clients with a four-point scale consisting of excellent, good, fair, and poor. In the 2010 survey, UNHCR rated OIOS/IAD as good for relevance of the work programme, objectivity and professionalism of staff and accuracy and clarity of reports. Areas where OIOS/IAD was marked fair, and where UNHCR would like to see improvement, or a change in focus, included: Vacancies: as discussed above, this should be resolved by the end of Bringing to the attention of management matters of high risk, which OIOS will strengthen through more regular discussion with senior management to discuss and summarize audit results. Increased focus on reviewing efficient and effective use of resources, especially financial management, which will be addressed in the 2012 work plan. Liaison with other oversight bodies 20. OIOS/IAD participated in the 2010 meeting of the Representatives of Internal Audit Services of the United Nations Organizations and Multilateral Financial Institutions (RIAS). This group discusses issues of common interest to the United Nations audit community. The 2010 meeting included presentations and discussion on the Joint Inspection Unit review of the audit function in United Nations system organizations, and an integrated financial accountability framework for humanitarian aid under development by the International Organization of Supreme Audit Institutions. OIOS/IAD also liaised with other Geneva and Europe-based audit organizations through informal networks and meetings. D. Advisory services 21. The MOU with UNHCR states that OIOS/IAD will to the extent that it does not conflict with OIOS s independence, provide advice to management, concerning, among other things, the interpretation of rules, policies or procedures. This is an area where UNHCR has indicated that it would like to see OIOS/IAD improve, but improvement in this area is proving a challenge for Headquarters advisory services: To improve visibility and make it easier to interact with UNHCR management, OIOS had requested an office in the UNHCR Headquarters, but this request has not been accommodated because of space limitations; and Current involvement is on an ad hoc basis, and efforts will be made in the next reporting period to discuss with UNHCR senior management how this could be improved. 22. During the reporting period, OIOS/IAD was involved in the following: Review of a payment made by UNHCR on behalf of the United Nations Compensation Commission. Assistance with the finalization of the UNHCR Affiliate workforce policy. Presentations to UNHCR staff in Kenya and Senegal. Assistance with proposed changes to the audit certification process. Provision of input on the terms of reference for the Independent Audit and Oversight Committee (IAOC). 6

7 III. Overview of results A. Audit coverage 23. Fifteen reports (Annex II) were issued as final and five reports were in the process of finalization with UNHCR (Annex III) at the end of the reporting period. This compares to 30 and 21 final reports issued in the two prior periods; the difference being attributable to the vacancy rate discussed earlier. 24. The audit coverage in the period by activity and risk focus area is shown in Figures 1, 2 and 3 respectively. The remainder of this section provides highlights of the audit results by risk focus area. Figure 1: Audit coverage by UNHCR geographical region, 1 July 2010 to 30 June 2011 Europe 5% MENA 14% Asia 5% HQ 44% Africa 32% Figure 2: Recommendations issued by risk focus area, 1 July 2010 to 30 June 2011 Programme and Project Management, 47 Safety and Security, 5 Strategic Management and Governance, 16 Information and Technology, 18 Supply Chain, 69 Human Resources, 24 Finance and Administration, 17 7

8 Figure 3: Critical recommendations issued by risk focus area 1 July 2010 to 30 June 2011 Safety and Security, 3 Strategic Management and Governance, 5 Programme and Project Management, 12 Supply Chain, 16 Information Technology, 6 Human Resources, 6 Finance and Administration, 2 B. Strategic management and governance 25. Two strategic issues are highlighted in this reporting period concerning the importance of a policy framework being in place to support decentralized operations. A comprehensive framework for policies and procedures is needed to support decentralized operations 26. UNHCR has a complex policy environment, dealing with operational and administrative instructions (rules and regulations) and conceptual protection positions that are the prerogative of the High Commissioner. To support this environment for a large field-based staff, a policy framework is needed, encompassing: a definition of policies and other guidance documents; guidance on approval, communication, implementation, and monitoring of policies; allocation of responsibility for overseeing, maintaining and supporting policy development; and putting in place a system allowing staff to easily access and search for policies and other guidance documents. At the time of preparation of this report, discussions were ongoing and no implementation date was available (AR2010/160/01, arrangements for policy creation and dissemination June 2011). Need for guidance to assist with downsizing and liquidating field operations 27. UNHCR agreed that a manual was needed to guide representatives during the liquidation phase of an operation, similar to the guidelines which exist for other United Nations operations, such as the United Nations Peacekeeping Liquidation Manual. The Division of Programme Support and Management (DPSM) and the Organizational Development and Management Service (ODMS) are in the process of developing guidance on the management of downsizing and/or liquidation phases of an operation as a complementary element to the Guidelines for Designing UNHCR s Presence in the Field and current operations management tools. This guidance will be incorporated into UNHCR s core guidance in the UNHCR Manual (AR2010/111/01, Operations in Sierra Leone, July 2010). 8

9 C. Programme and project management 28. Programmatic activity remains a primary focus of OIOS/IAD audits. Planning, monitoring and management of implementing partners (IPs) remain important areas for the attention of UNHCR s senior management. Compliance with procedures for the selection of IPs needs to be strengthened 29. UNHCR operations in Pakistan were using 52 IPs in 2010 to implement projects valued at $176 million. In Yemen, 18 IPs were being used with a total programme expenditure of $9.9 million in 2008 and In both cases, inadequate documentation was in place to demonstrate the capacity of selected IPs to carry out the work. In both cases, UNHCR took prompt action to address the situation. (AR2010/141/01, Effectiveness and efficiency of implementation of project activities in UNHCR operations in Pakistan, June 2011; AR2010/131/03, Effectiveness and efficiency of implementation of project activities in UNHCR operations in Yemen, June 2011). Scope to improve arrangements for financial and performance monitoring 30. Whilst Yemen was carrying out monitoring visits in compliance with rules, recommendations were made to strengthen the monitoring in the Central African Republic, Pakistan, Jordan and Benin. In the Central African Republic, an annual plan of monitoring visits needed to be prepared and improvements made to arrangements for performance and financial monitoring, which was also the case for Benin. In Pakistan, the documentation needed to be improved to provide evidence of monitoring carried out, and in Jordan, host country restrictions had impeded project monitoring. All issues were promptly addressed (AR2010/141/01, Effectiveness and efficiency of implementation of project activities in UNHCR operations in Pakistan, June 2011; AR2010/131/03, Operations in Yemen, June 2011; AR2010/110/01, Operations in Central African Republic, December 2010; AR2010/131/05, Programme management of the Iraqi situation in Jordan, December 2010; AR2010/111/04, Operations in Benin, December 2010). Need for guidance on use of local IPs when moving out of the emergency phase of an operation 31. When a UNHCR operation moves out of the emergency phase, it decreases its reliance on international IPs and increases its use of national IPs. Central guidance would assist representations in conducting this transition phase in an effective and economical manner. OIOS expected that the transition would be supported by a strategy document, based on Headquarters guidelines, addressing the issues that representations needed to consider, such as capacity building for local IPs to handle their new functions. For example, in the case of the Jordanian health sector, the budget allocated by UNHCR to the two national health non-governmental organizations (NGOs) designated to take over medical assistance increased by $1.7 million (55 per cent) between 2008 and However, the agreement with one NGO was terminated on 31 December 2009 owing to the poor quality of services provided. UNHCR explained that, whilst the transition to national NGOs is guided by and embedded in UNHCR s programme management and partnership there was a need to develop a more comprehensive approach to capacity building of UNHCR s partners. Current initiatives include the development of training modules on Results-Based Management (RBM) and related issues, in collaboration with the Global Learning Centre, and the updating and revision of basic guidance. The updating/revision of Chapter IV of the UNHCR Manual will provide field offices with an updated tool for the management of partnerships with international and national NGOs. This will be followed by a revision of UNHCR s Partnership Handbook, which is a resource for partners managing programmes for UNHCR. In conjunction with the updating of the 9

10 above-mentioned guidance, discussions will continue among the Divisions of Financial and Administrative Management (DFAM), External Relations (DER) and Programme Support and Management (DPSM) on further initiatives possibly required to strengthen capacity-building initiatives of UNHCR in the Field, as well as the capacity of offices to manage the transition from international to national partners (AR2010/131/05, Programme management of the Iraqi situation in Jordan, December 2010). Uninsured inventory in Pakistan resulted in losses 32. Chapter VIII of the UNHCR Manual on Supply Chain Management requires that the warehouse inventory be insured as a safety mechanism against the threats of theft, floods, and other contingencies. The sub-agreement between the Representation for Pakistan and the IP responsible for logistics solutions, transport and freight forwarding services states that the issue of insurance will be decided after mutual negotiations between UNHCR and the IP. UNHCR allocated $47,000 for insurance in the IP s budget for 2010, which was given to the IP in April 2010; however, the insurance had not been concluded before floods in July 2010 destroyed inventory valued by the Local Asset Management Board (LAMB) at $2.9 million. However, in early December 2010, the situation was corrected and the office contracted an insurance firm to insure the inventory. The LAMB endorsed the case for write off, but there has been no review to establish accountability for the loss. However, the matter is being actively pursued by UNHCR in order to bring closure to this important issue (AR2010/141/01, Effectiveness and efficiency of implementation of project activities in UNHCR operations in Pakistan, June 2011). Need to improve strategic planning for the large water pipeline project in Algeria 33. A strategic plan had not been created for the largest and most visible UNHCR project in Algeria, a water pipeline project with a total budget of $4.5 million during the period UNHCR agreed that a strategic plan was needed, funding to implement this was received from the European Commission and this recommendation is in process of implementation (AR2010/111/01, Operations in Algeria, July 2010). D. Supply chain management 34. The total value of UNHCR s procurement activities was $740 million in This therefore remains a key area for audit, particularly international procurement which represents 40 per cent of procurement activity. Asset management also remains an important area for senior management attention. Asset management remains a cause for concern 35. Asset management in the Field was a cause for concern in last year s report (A/AC.96/1088) which flagged key weaknesses in physical checks and irregular updating within inventory systems. In this reporting period, whilst an improvement has been noted in Algeria, ensuring the accuracy and completeness of asset data has been a problem in most other offices visited, suggesting that this is an area for UNHCR to focus on (AR2010/141/01, Effectiveness and efficiency of implementation of project activities in UNHCR operations in Pakistan, June 2011; AR2010/131/03, Operations in Yemen, June 2011; AR2010/110/01, Operations in Central African Republic, December 2010; AR2010/131/05, Programme management of the Iraqi situation in Jordan, December 2010; AR2010/111/04, Operations in Benin, December 2010; AR2010/111/01, Operations in Sierra Leone, July 2010). 10

11 Scope for improvement in the management of international procurement activities 36. UNHCR is in the process of addressing the following gaps in arrangements for international procurement,(ar2010/163/01, Audit of UNHCR's arrangements for managing international procurement-related activities, July 2010): Clarification of the functional responsibilities of the Supply Management Service (SMS) and overall Supply Management (implemented); Ensuring that the projected Management Systems Renewal Process (MSRP) system upgrade meets the requirements of SMS (implementation in progress); Development of Key Performance Indicators to measure the efficiency and effectiveness of procurement (implemented); Development of a comprehensive procurement planning policy (implementation in progress); Procurement guidelines and detailed procedures for emergencies (implementation in progress). Local procurement arrangements in Kenya need to be strengthened 37. At the request of UNHCR, OIOS/IAD audited the adequacy and effectiveness of local procurement arrangements in Kenya. The budget was $20.3 million in 2009 and $9.7 million in the first seven months of The conclusion was that there was scope for improvement in the following areas, all of which are in the process of being implemented (AR2010/112/01, Local procurement activities in Kenya): Developing standard operating procedures for Supply Units; Establishing procedures for monitoring procurement activities; Developing procurement planning procedures; Developing a comprehensive plan to monitor procurement activities carried out by IPs to ensure compliance with IP Procurement Guidelines; Enhancing the effectiveness of the Local Committee on Contracts by training its members on their level of authority and main roles. Need to consider the effect of tax when using IPs for procurement 38. UNHCR uses IPs to undertake procurement on its behalf, and in many cases they are not exempt from tax. The need for this situation to be assessed on a UNHCR-wide basis was clear in Pakistan where the use of IPs for shelter projects meant that UNHCR Pakistan could be liable to pay some $13 million of Value-Added Tax through sub-projects implemented by the IPs. UNHCR in Pakistan took measures to monitor the use of IPs in order to minimize cost implications. (AR2010/141/01, Effectiveness and efficiency of implementation of project activities in UNHCR operations in Pakistan, June 2011). 39. Issues relating to tax exemption were also noted in the Central African Republic and Algeria, suggesting that this is also an area for UNHCR to monitor, given the potential financial implications (AR2010/110/01, Operations in Central African Republic, December 2010; AR2010/111/01, Operations in Algeria, July 2010). OIOS will be discussing with UNHCR how this issue might be tackled on a global basis. 11

12 E. Financial management 40. During the reporting period, OIOS/IAD focussed on the financial implications arising from supply and programme management actions, which are discussed in the relevant parts of this section. F. Human resources management 41. The highest risk area identified and agreed upon with UNHCR for review in this reporting period was the situation of Staff In Between Assignments (SIBAs). Scope to improve arrangements for SIBAs 42. Although efforts have been made through the establishment of the Career Management Support Section and the introduction of various policies and procedures aimed at better management and administration, the following recommendations were made, which UNHCR is in the process of implementing: Development of an organizational strategy and a comprehensive policy document consolidating all SIBA-related policies; Establishment of the risk-tolerance levels for SIBAs, including the maximum length of time a SIBA should normally remain without an assignment; Human resource oversight mechanism over post changes; Review of the balance between the number of posts compared to the number of appointed staff, and the circumstances for terminating appointments. 43. At the time of preparation of this report, work is in progress, including a definition of the status of SIBAs through the issuance of an inter-office memorandum (IOM-FOM 081/2010, Staffing Nomenclature, December 2010). Additionally, UNHCR is working on the development of an overall strategy which will be reflected in a policy document addressing SIBA issues (AR2010/162/02, UNHCR's arrangements for managing and administering SIBAs, December 2010). G. Information and Communications Technology (ICT) management 44. In recognition of the important role ICT plays in UNHCR operations, OIOS assigned an auditor exclusively to provide advice and support to auditors on ICT-related matters, and observations were made on field audits, to strengthen backup and recovery. Two ICT audits were carried out as outlined below. Review of Focus is needed to ensure that the system meets user requirements and is managed in a cost-effective manner 45. Focus is the key component of UNHCR's information technology (IT) toolset for RBM, interfacing with the organization s Enterprise Resource Planning system. Focus provides a number of useful tools for decision making, such as the availability of a consolidated view of the staffing table, the organizational chart and the progamme activities of each UNHCR office. While these tools have demonstrated the value of Focus, project governance and management needed to be strengthened to ensure that the system developed was cost-effective and met the users needs. UNHCR took prompt action to address the issues which included an internal stocktaking with stakeholders and the establishment of a new charter dealing with roles and responsibilities. Among others, the current phase 2 of 12

13 the Focus system aims to give end-to-end visibility at Headquarters on the performance of the operations, and provide access to selected information to external parties to assess UNHCR s funding needs (AR2009/166/02, Focus systems, October 2010). Need to strengthen the control system for managing ICT service contracts with third parties in country offices 46. The Information and Communications Technology Governance Board (ICTGB) established in 2006 required all UNHCR offices undertaking ICT projects to justify their viability and alignment with the strategic objectives of UNHCR. However, the ICT projects initiated by the country offices were not subject to the scrutiny of the ICTGB, thereby providing little assurance that adequate controls had been designed and implemented to mitigate the associated risks. Several UNHCR country operations either did not have available dedicated ICT staff or their numbers were not commensurate with the size and risks of the operation. UNHCR agreed and explained that the change programme initiated in the Division of Information Systems and Telecommunications (DIST) would address these issues (AT2010/166/01, Information and Communications Technology services contracted to third parties in the UNHCR country offices, March 2011). H. Safety and security 47. In the previous reporting period, OIOS/IAD reported on governance aspects of security arrangements. In the current reporting period, OIOS looked at field offices in Africa where more attention should be paid to ensuring that security reviews are undertaken, and results implemented and monitored. In all cases, prompt action was taken to address the issues (AR2010/111/01, Operations in Algeria, July 2010; AR2010/110/01, Operations in Central African Republic, December 2010). IV. Status of implementation of recommendations A. Implementation rate 48. Figure 4 shows the implementation rate of all recommendations over the last five years, and Figure 5 the recommendation rate for critical recommendations. The Representations remains very active in ensuring recommendations are closed in a timely manner. The longer time taken for the closure of Headquarters recommendations reflects the fact that these often involve changes of policy that take longer to develop and implement. 13

14 Figure 4: Implementation rate of recommendations over the last 5 years by risk focus area % % 79% 80% % 64% 64% 70% Recommendations % 52% 60% 50% 40% 30% Implementation Rate Yet to be implemented Implemented Implementation Rate % 50 10% 0 Supply Chain Finance and Administration Human Resources Information Technology Programme and Project Management Safety and Security Strategic Management and Governance 0% Figure 5: Implementation rate for critical recommendations over the last 5 years by risk focus area % 90% 80% % 66% 70% Recommendations % 58% 52% 54% 60% 50% 40% 30% Implementation Rate Yet to be implemented Implemented Implementation Rate 30 20% % 0 Supply Chain Finance and Administration Human Resources Information Technology Programme and Project Management Safety and Security Strategic Management and Governance 0% B. Recommendations over two years old 49. During the reporting period, OIOS/IAD worked with UNHCR on long-outstanding recommendations resulting in the closure of 30 recommendations. As a consequence of implementing these recommendations the following policies have been issued: Affiliate Workforce Arrangements (inter-office memorandum IOM-FOM 031/2011) a) This provides guidance on affiliate workforce arrangements as well as an overview of the existing range of arrangements to broaden awareness and understanding by managers and staff (closed recommendations 1, 4 and 5 of AR2005/162/01, UNHCR Project Staff). Use of biometrics in refugee registration (inter-office memorandum IOM-FOM 083/2010) b) This includes identifying the most suitable, reliable and cost-effective technology available for use in UNHCR operations on the basis of proposals from country offices. Subsequently, taking into account various proposals received from country 14

15 operations, UNHCR will establish a global action plan to introduce biometrics, based on priorities and needs. (Closed recommendation 5 of AR2005/163/01, UNHCR Project Profile). Asset management policy (inter-office memorandum IOM-FOM 067/2010) c) This deals with the roles and responsibilities of the Asset Management Board and closed recommendation 4 of AR2007/161/03, UNHCR Headquarters Asset Management Board, and recommendation 10 of AR2009/121/02, Operations in Georgia - Asset Management. 50. At the end of the reporting period, 67 recommendations were still open after more than two years (Annex IV). OIOS will continue working with UNHCR on closure, especially in the following areas which OIOS considers important: Reimbursement for private use of vehicles a) Raised in 2003, OIOS/IAD recommended that UNHCR look into reimbursement for private use of vehicles in Pakistan. UNHCR looked at the issue worldwide and at the end of 2007, a draft proposal regarding a flat rate for the private use of vehicles was circulated for comments within UNHCR. At the end of 2009, the Division of Financial and Administrative Management (DFAM) issued a survey to serve as the basis for computing a universal charge rate. The current target date for closure is the end of Retrenchment benefit b) Raised in 2006, OIOS/IAD recommended the development of a policy for payment of retrenchment benefit to project personnel and IPs. OIOS/IAD reiterated the importance of implementing the recommendation in the audit of operations in Côte d'ivoire (AR2010/111/03, December 2010) where an IP had filed a request with UNHCR for the payment of $85,000 for retrenchment benefits, following a decision not to renew its agreement. This case is important because the United Nations presence in the country is composite and other United Nations agencies work with local IPs. Prompt action was taken to discuss the issue with the UNHCR Legal Affairs Section (LAS) and other relevant Headquarters departments, and this recommendation is still open. The status on the 2006 recommendation is that the policy document is under preparation. UNHCR maintains that it has no liability for the payment of retrenchment benefits and is considering the matter as part of the overall review of arrangements pertaining to IPs, as UNHCR considers that other related areas, with regard to policy on support costs and operational costs for IP arrangements, needed to be reviewed concurrently to ensure consistency. Network security c) Raised in 2007, OIOS recommended that UNHCR conduct penetration tests to monitor the effectiveness of system security and network infrastructure. The status is that the position of Senior Information Security Officer (P-4) has been secured and will be filled as a priority under the transition to the new UNHCR IT structure. Once filled, the incumbent will work to address the issues raised by OIOS. No target for implementation has been given. 15

16 16 Annex I Status of assignments planned for the period from 1 July 2010 to 30 June 2011 A/AC.96/1101 Assignment number Assignment Title Status 1 AR2010/131/02 Operations in Algeria Completed 2 AR2010/131/03 Operations in Yemen Completed 3 AT2010/166/01 Information Communication Technology services contracted to third parties Completed 4 AR2010/160/01 UNHCR's arrangements for policy creation and dissemination Completed 5 AR2010/141/01 Effectiveness and efficiency of implementation of project activities in operations in Pakistan Completed 6 AR2011/111/01 Audit of UNHCR Regional Representation for West Africa Completed 7 AR2011/121/01 Audit of UNHCR operations in Azerbaijan Completed 8 AR2010/111/04 Operations in Benin Addition, completed 9 AR2010/112/01 Local procurement activities in Kenya Addition, completed 10 VR2011/161/01 UNHCR payment of claims approved by the United Nations Compensation Commission Addition, completed 11 AR2011/162/01 Human resources management function outposted to the Global Service Centre in Budapest Draft reporting 11 AR2010/160/02 Anti fraud control mechanisms in the individual case management system Draft reporting 13 AR2011/113/01 Audit of UNHCR operations in Zambia Draft reporting 14 AR2011/162/03 Audit of UNHCR s Global Learning Centre Draft reporting 15 AT2011/166/02 Audit of Arrangements for Business Continuity and Disaster Recovery for non-peoplesoft Applications Draft reporting 16 AR2011/115/01 Operations in Chad Draft reporting 17 AR2011/141/05 Shelter Programme for returned IDPs in Sri Lanka Addition, draft reporting 18 AR2011/141/06 Reintegration cash grant programme for returning Sri Lankan refugees Addition, audit ongoing 19 AR2011/110/04 Operations in Gabon Audit ongoing

17 Assignment number Assignment Title Status 20 AR2011/151/01 Operations in Ecuador Audit ongoing 21 AR2010/111/02 Operations in Nigeria Cancelled 22 AR2010/161/01 Implementation of the Resource Allocation Framework in the field Cancelled 23 AR2010/131/01 Arrangements for audit certification Replaced with advisory 24 AR2011/131/01 Operations in Iraq situation (Syrian Arab Republic) On-hold Security situation/ resident auditor under recruitment 25 AR2011/131/02 Operations in Iraq Situation (Iraq) Under discussion for 3rd quarter 26 AR2011/141/01 Operations in Sri Lanka (programme management) Replaced with Shelter Grant 27 AR2011/141/02 Operations in Sri Lanka (supply management ) Moved to 3rd quarter 28 AR2011/167/01 Arrangements for emergency preparedness and response Moved to 4th quarter 29 AR2011/112/01 Operations in Kenya (programme and finance management) Moved to 4th quarter A/AC.96/

18 18 Annex II Final reports issued during the period 1 July 2010 to 30 June 2011 A/AC.96/1101 Assignment No. Assignment Title Date of Report 1 AR2010/111/01 Operations in Sierra Leone 26-July-10 2 AR2010/163/01 Management of the international procurement component in Global Service Centre in Budapest 30-July-10 3 AR2010/166/02 Focus project management: system requirements, design and development 29-October-10 4 AR2010/110/01 Operations in Central African Republic 10-December-10 5 AR2010/131/05 Operations in Jordan Iraqi situation 14-December-10 6 AR2010/111/03 Operations in Côte d'ivoire 16-December-10 7 AR2010/111/04 Operations in Benin 17-December-10 8 AR2010/162/02 UNHCR s arrangement for managing and administering staff in-between assignments 17-December-10 9 VR2011/161/01 UNHCR payment of claims approved by the United Nations Compensation Commission 4-February AT2010/166/01 ICT services contracted to third parties 3-March AR2010/131/02 Operations in Algeria 8-April AR2010/131/03 Operations in Yemen 1-June AR2010/112/01 Local procurement activities in Kenya 1-June AR2010/160/01 UNHCR's arrangements for policy creation and dissemination 10-June AR2010/141/01 Effectiveness and efficiency of implementation of project activities in UNHCR operations in Pakistan 15-June-11

19 Annex III Reports in process of finalization with UNHCR as of 30 June 2011 Assignment No. Assignment Title Date of Report 1 AR2011/162/01 Human resources management function outposted to the Global Service Centre in Budapest 29-April-11 2 AR2010/160/02 Anti-fraud control mechanisms in the individual case management system 6-June-11 3 AR2011/113/01 Operations in Zambia 8-June-11 4 AR2011/121/01 Operations in Azerbaijan 10-June-11 5 AR2011/111/01 Regional Representation for West Africa 14-June-11 A/AC.96/

20 20 Annex IV Recommendations open for more than two years A/AC.96/1101 Assignment Number Assignment Title Report Date Number of Recommendations Critical Recommendations AR2003/132/04 Operations in Pakistan 21-Jul AR2005/162/07 Retrenchment Benefits for Implementing Partner Project Personnel 08-May AR2005/163/01 Project Profile 17-May AR2006/115/02 Operations in South Sudan 31-Jan AR2006/166/04 Information and Communications Technology Management 09-Mar AR2006/121/04 Operations in Turkey 16-Mar AR2006/161/01 Fleet Management 06-Jul AR2007/111/01 Operations in Guinea 16-Nov AR2007/115/02 Operations in Chad 16-Nov AR2007/110/02 Operations in the Democratic Republic of the Congo 20-May AR2007/115/01 Operations in Khartoum and East Sudan 23-Sep AR2007/115/02 Operations in South Sudan 25-Sep AR2008/166/01 Information Technology Security (PeopleSoft Applications) 17-Oct AR2007/161/03 HQ Asset Management Board 14-Nov AR2008/121/01 Operations in Romania 09-Dec AR2008/113/01 Operations in Malawi 05-Mar AR2007/141/02 Liaison Office in Manila, Philippines 25-Mar

21 Assignment Number Assignment Title Report Date Number of Recommendations Critical Recommendations AR2008/112/03 Operations in Tanzania 06-Apr AR2008/162/02 Human Resources (PeopleSoft) Module 27-May AR2008/110/04 Recruitment Process for National Staff in the Democratic Republic of the Congo 16-Jun AR2008/115/02 Procurement activities in Khartoum and East Sudan 18-Jun Total number of recommendations open for over two years A/AC.96/