2008/13
Internal audit and oversight (UNDP, UNFPA and UNOPS)

The Executive Board


1.     Takes note of: (a) the report on internal audit and investigations in UNDP (DP/2008/20); (b) the report on UNFPA internal audit and oversight activities in 2007 (DP/FPA/2008/11); and (c) the report of the United Nations Office for Project Services (UNOPS) on internal audit and oversight in 2007 (DP/2008/21);

2.     Welcomes the focus on key and recurrent management issues, the clarity and format of the recommendations, and the risk-based audit planning in the internal audit reports;

3.     Recalls decision 2006/19, and requests UNDP, UNFPA and UNOPS to include in their respective audit and oversight reports: (a) a list of the key findings and the ratings, (b) a table displaying unresolved audit recommendations by year and category, and (c) an explanation of findings that have remained unresolved for 18 months or more;

4.     Calls upon UNDP and UNFPA to further strengthen the national execution modality by addressing the operational risks and weaknesses identified in the audit reports, with particular attention given to capacity-building, and requests UNDP and UNFPA to inform the Executive Board of the implementation of the proposed actions;

5.     Recalls General Assembly resolution 62/208, which calls upon United Nations organizations to adopt measures that ensure sustainability in capacity-building activities, and to use, to the fullest extent possible, national execution and available national expertise and technologies as the norm in implementing operational activities by focusing on national structures and by avoiding, wherever possible, the practice of establishing parallel implementation units outside national and local institutions, and to continue to strengthen national execution, bearing in mind the importance of building national capacity and simplifying procedures and aligning them with national procedures, and in this regard requests UNDP and UNFPA to report to the Executive Board on actions and experiences in strengthening national execution;

6.     Requests UNDP and UNFPA to report to the Executive Board at its annual session 2009 on progress made and lessons learned in implementing the harmonized approach to cash transfers, including in connection with the development of procedures, capacity-building and reporting mechanisms;

7.     Notes with appreciation harmonized and standardized use of audit ratings by UNDP, UNFPA, UNOPS, the United Nations Children’s Fund and the United Nations World Food Programme;

8.     Notes with concern that the inter-fund balance and other outstanding issues between UNDP and UNOPS, referred to in decision 2007/27, have not yet been resolved, and requests UNDP and UNOPS to work with relevant partners to rapidly resolve these issues;

With regard to UNFPA,

9.     Notes with appreciation the management response to the UNFPA report on internal audit and oversight activities in 2007, the report of the Audit Advisory Committee for 2007, and the updated status of the audit recommendations of the United Nations Board of Auditors on UNFPA accounts for the period ending 31 December 2005;

10.     Requests that future annual reports on internal audit and oversight activities provide additional explanations of the significant audit results and their causes, identify the systemic issues of concern and provide more information on quality improvements in the oversight systems of UNFPA;

11.     Expresses support for UNFPA implementation of the national execution modality in line with General Assembly resolution 62/208, and encourages strengthening national capacity in this regard;

12.     Expresses support for the continued strengthening of the accountability and assurance process in UNFPA and the reorganization of its internal audit and oversight services, to sustain, inter alia, an adequate frequency and coverage of internal audits, and urges the Executive Director to continue to strengthen risk-based audit planning and to fill vacant posts in the Division for Oversight Services;

13.     Takes note of efforts to implement the risk model in its regional and country offices and encourages UNFPA to further implement it at all management levels and across a broad range of risks;

14.     Notes with appreciation the development of an enterprise risk management approach, and, in this regard, calls upon UNFPA to update the Executive Board on its progress at the annual session 2009;

15.     Welcomes the commitment of UNFPA to improving its internal control framework, in line with internationally recognized best practices;

16.     Requests the Executive Director to take the necessary measures to ensure compliance with the internal control framework, in response to the findings of the UNFPA report on internal audit and oversight activities in 2007;

With regard to UNDP,

17.     Notes with appreciation the management response to the report on internal audit and investigations in UNDP, the report of the Audit Advisory Committee for 2007, and the management response to that report;

18.     Expresses continuing support for strengthening the internal audit and investigation functions of UNDP, and urges the Administrator to further strengthen risk-based audit planning and to rapidly fill vacant posts in the Office of Audit and Investigations;

19.     Expresses concern that 13 per cent of the ratings in the internal audit reports are ‘unsatisfactory’, that some audit findings have remained unresolved for 18 months, and that there are investigation findings on the misconduct of staff members, and requests UNDP to report to the Executive Board at its annual session 2009 on the progress made in these areas, as part of the annual report on internal audit and investigations;

20.     Notes the efforts of UNDP senior management to strengthen programmatic accountability and enhance the internal capacity of the organization to address compliance issues regarding prescribed regulations, rules and procedures, and supervision by managers at country office and regional levels, and encourages UNDP to continue to include in future reports a review of progress in this regard;

21.     Notes improvements in the timeliness and quality, as well as the overall outcome, of national execution audit reports;

22.     Notes that specific audit procedures and guidelines are being developed in response to the use of the harmonized approach to cash transfers, and calls upon UNDP to develop such procedures and guidelines in coordination with other United Nations funds, programmes and agencies and in consultation with programme countries;

With regard to UNOPS,

23.     Notes with appreciation the management response to the UNOPS report on internal audit and oversight in 2007;

24.     Welcomes the establishment in 2007 of the Internal Audit Office in UNOPS and the transition from the UNDP Office of Audit and Performance Review to the UNOPS Internal Audit Office;

25.     Also welcomes the establishment of the Strategy and Audit Advisory Committee in UNOPS;

26.     Notes the other initiatives in UNOPS that will strengthen audit and oversight, undertaken in response to the UNOPS report on internal audit and oversight;

27.     Notes submission by UNOPS of an accountability framework and oversight policy (DP/2008/22), and requests the Executive Director of UNOPS to revert to the Executive Board with this policy at the second regular session 2008, ensuring coordination and harmonization with UNDP and UNFPA.

26 June 2008