"Audit the Budget Process"
ANNEX 2: AUDIT RECOMMENDATIONS UNRESOLVED OVER 18 MONTHS INDICATOR OF IMPLEMENTATION / REGION COUNTRY AUDIT NAME YEAR RECOMMENDATION # RECOMMENDATION MANAGEMENT COMENTS STATUS PROGRESS “UNOPS agrees with the recommendation and will ensure that all control procedures are established and applied which require that project budgets are approved and expenditure are incurred in accordance with budget Limited scope audit of the global authorizations” In line with the current UNOPS financial regulations, SWOC is carefully monitoring all project expenses monitoring for stability and security On-going: Expenditures are within the EUO SWOC 2007 1 expenditures should not exceed the funds received to ensure that these are within the approve budget (GMOSS) activity under Project Expected Completion Date: “ A Circular letter was sent in October 2006 to those responsible for project approved budget. and the authorized budget. amount. INT/01/R73 management.” Responsible Manager: Rino Semiro Imponenti, Chief a.i. . Division of Finance and Administration. “While we generally agree with OAPR‟s recommendation that detailed definition of budgets assist in proper budget Limited scope audit of the global and management control, in this particular case UNOSAT services to the EC GMOSS contract are limited in scope We recommend that project budgets be properly monitoring for stability and security (predominantly personnel services and limited travel services (max 2-3 trips per annum) and volume (EUR 24,000 EUO SWOC 2007 2 defined when entering into any contracts with donors Unchanged. See reply (GMOSS) activity under Project per annum). We believe that complex renegotiations of the budget structure with the EC and the GMOSS and funding agencies. INT/01/R73 consortium, of which UNOSAT forms part, are disproportionate in relation to the added value that a further detailed budget may bring to management control for the limited GMOSS activities for which UNOSAT is responsible.” “Expertise provided by UNOSAT team members is support to the UNOSAT work package under GMOSS is an Limited scope audit of the global We recommend that through a budget revision in integral part of the UNOSAT program – INT 01 R71. Any administrative separation of work time dedicated by the monitoring for stability and security EUO SWOC 2007 3 Atlas, the GMOSS activity should be separately UNOSAT team members to GMOSS, through the creation of a separate activity for GMOSS, would administratively Unchanged. See reply. (GMOSS) activity under Project identified as a project or an activity. be extremely cumbersome. In addition, also from a substantive prospective separation of GMOSS activities from the INT/01/R73 rest of UNOSAT operations would not reflect the real content of the entire operation.” “We do not agree with OAPR‟s recommendation, as this would excluded UNOPS from participating in many operations and cooperating with many international partners, to which different accounting periods apply. In addition, it is not plausible to us why the reporting period has to match the principle of a calendar year and cannot refer to any period as long as expenses truly accurately reflect UNOPS official financial records.” Limited scope audit of the global The final financial report is due during this month. The project financial reporting period should be in line monitoring for stability and security OAPR Response to UNOPS Management Comments: SWOC will attempt issuance of two financial EUO SWOC 2007 5 with the UNOPS financial period, as stipulated in the To be implemented during April 2008. (GMOSS) activity under Project reports, for 2007 and 2008 separately, and see UNOPS financial regulations and rules. INT/01/R73 It is essential to follow the organizational accounting period in order to authenticate and support underlying whether this is acceptable for the EC expenses charged in the books of accounts. However, in cases where a donor reporting requirement would intersect between two accounting periods, separate report for each UNOPS accounting period can be issued along with a combined report, if required. We, therefore, do not agree with the UNOPS management comments. Hence, we maintain audit recommendation 5 that the project financial reporting period should be in line with the annual year- end closing of the UNOPS financial accounts. “a. We agree with OAPR‟s recommendation and will coordinate with OLS to pursue adjustment of the GMOSS SWOC will pursue joint review with OLS. SWOC We recommend that in consultation with the Office of contract to UN audit principles. points out that the current contract terminated at Legal Service, the GMOSS contract be reviewed to b. We will also follow-up with OLS concerning UNOPS inclusion in the Financial and Administrative Framework Limited scope audit of the global the end of February 2008 and that therefore bring such contract in line with the single audit Agreement (FAFA) between the United Nations and the European Commission, so that EC audit requirements are monitoring for stability and security negotiations with the EC for the adjustment of the EUO SWOC 2007 6 principle. As well, UNOPS should pursue its request harmonized for UNOPS in accordance with UN agencies and UN auditing guidelines.”. On-going (GMOSS) activity under Project GMOSS contract text may not be timely. SWOC for inclusion in the Financial and Administrative INT/01/R74 will ensure that all future contracts with the EC will Framework Agreement (FAFA) between the United Expected Completion Date: be jointly reviewed between SWOC and OLS to Nations and the European Commission. a. Immediately. Completion targeted by 28 February 2007 ensure that the single audit principle is respected. b. Upon completion of UNOPS 2004-2005 audit review. The situation was resolved, the QFS finally Full scope audit of the MSA activity Adjustments and corrections of transactions should was agreed by HQ and the refund made to LCO Argentina "Technical assistance -National Tax 2007 4 be done in a timely manner, that is, within the same “No comments” Implemented (need supporting documents) the World Bank on November 3rd. (Please identification project". accounting period. see attachment). “Comments noted. In real terms, no formal Impact Assessment has been done in this project. Instead, as per the Two M&E Experts were recruited to carry out a Prodoc, the Annual HDI Assessment was done. UNOPS Project Office is Yangon along with the Implementing survey for an impact assessment study in all 3 Partner in Delta Zone took the initiative and carried our an assessment of this nature. We plan carrying out similar project areas during August-September 2007 and The management of UNOPS Yangon Office should exercise in Dry Zone and Shan State once new IP has formally settled in with new management an analysis of the data collected was done and a Audit of the Project “Sustainable ensure that a formal detail assessment is carried out structure/operations. report prepared and submitted to UNOPS and APO Nyanmar Microfinance to improve the 2007 4 to assess and determine the impact of the project in Ongoing UNDP in December 2007. As a follow-up, field Livelihoods of the Poor” in Myanmar achieving the project objective of poverty alleviation in The previous years HDI Assessment Teams also suggested that this assessment should be done. visits were made in December 2007 to share the Dry Zone and Shan State. findings of the impact studies with the IP's field UNOPS will bring to the attention of UNDP on the need for an impact assessment of this project. staff. The M&E Experts also visited the Dry Zone in March 2008 for a social performance study. The management of UNDP/UNOPS Yangon Office should consider the following: • exploring any other approach to ensure the efforts to create a conducive legal framework can be achieved; Audit of the Project “Sustainable Project office in Yangon was informed by UNDP • formulate appropriate action plans/strategies to APO Nyanmar Microfinance to improve the 2007 5 “UNOPS has noted the auditor‟s recommendation and will bring it to the attention of UNDP.” that pursuing the creation of a legal framework Not implemented continue the lobbying activities of establishing legal Livelihoods of the Poor” in Myanmar was not within the HDI Mandate. framework; and • once legal framework is achieved, to assess the relevance of current counterpart department and , change the counterpart department, if necessary. The management of UNOPS Yangon Office should: • review and assess the risks identified in the Audit of the Project “Sustainable PRODOC and any new emerging risk on annual basis; APO Nyanmar Microfinance to improve the 2007 8 • measure the risks and assign risk ratings; and “Noted. We will further discuss with UNDP and review the prioritization need to conduct a risk assessment. Implemented (need supporting documents) Ongoing Livelihoods of the Poor” in Myanmar • discuss the action plan in mitigating the risks in meeting involving the donor, executing agency and implementing partner. The management of UNOPS Yangon Office should “The end date of the Evaluation period was 10 September 2006. On 1 September 2006, UNOPS Bangkok sent Audit of the Project “Sustainable Contract durations are monitored by UNOPS APO ensure a contract renewal procedure should be in email on performance evaluation of Mr. Bhuiya requesting that PACT complete process as per contract and submit APO Nyanmar Microfinance to improve the 2007 9 ans contractors are informed and advised on On-going (Not support document recived) place to ensure all contract are renewed prior to its to UNOPS Bangkok. This has now been submitted. There were regular discussion on Mr. Bhiya‟s achievement of Livelihoods of the Poor” in Myanmar contract renewal/amedment procedures accordigly. expire date. the worplan and follow-up by Portfolio Manager to check whether activities were met timely.” INDICATOR OF IMPLEMENTATION / REGION COUNTRY AUDIT NAME YEAR RECOMMENDATION # RECOMMENDATION MANAGEMENT COMENTS STATUS PROGRESS UNDP Assets inventory list for 2004 (project 00011043 and 00036284), inventory list of assets for 2005 (project 00036284) as well as the inventory of the assets reflected at 31/08/2006 have been provided. UNDP has provided the distribution of the donated assets to different Afghan institution and sold equipment. According to UNDP Assets Guidelines, no project non-expendable inventory records should be recorded in the ATLAS Assets Module. Only the assets purchased from the administrative budget should be recorded in ATLAS. At this stage, it would be in the best of interest of Proper records regarding the distribution of assets in the regions and Kabul have been maintained in 2004 in the UNDP, UNOPS and concerned donors to immediately Master Inventory List. Each asset has been recorded with all the details (description, model, UN bar code No, serial take stringent steps to dispose and use the no, location and responsible person‟s details). equipment that are stored at the warehouse and recover the best value from sale, transfer or disposal. A complete quantitative reconciliation since 2002 up to 31/08/2006 was not the scope of this exercise as a previous UNOPS: Liquidation Under process, forthwith “Audit of the Afghan Election Project external audit took place in 2004. Physical inventory stock take conducted in September 2005 includes all the MEO Afghanistan 2007 16 UNOPS: In Process disposal will commence. Also please refer to 2004 -2006 assets purchased from 2002 onwards. Inventory conducted in 2006 represents the remaining assets after donation The Management is recommended to use the UNOPS remarks in rec.17 authority of CAP in UNDP and Local Property Survey and selling was concluded. Board („LPSB‟) in UNOPS for disposal of goods after Even though a reconciliation of the assets is not possible since 2002 due to various reasons, we have presented all a concrete disposal plan is formulated and approved. the documents from 2004 onwards. Further more, donations, sold and inventory at 31/08/2006 were available. All the details pertaining to non-expendable assets (description, model, bar code no, serial no, location, project no, purchase order no, date of purchase) are recorded in the 2006 Election‟s Project Assets Database. Due to the fact that assets have been donated/sold in 2005-2006 by UNOPS, the disposal transactions documented by the handover forms should have been provided by the custodian of the assets (i.e. UNOPS). From UNDP side all available documentation was provided. We consider that a separate audit rating for UNDP and UNOPS Assets/Inventory Management would be more adequate. Assets/Inventory Audit has to be divided in two parts: UNDP from May 2004 – December 2004 and UNOPS from January 2005 – present moment UNDP We acknowledge the recommendation, but several issues have to be taken into account: • The property and legal aspects of the warehouse facilities have to be cleared first (The President handed over the land to the Independent Election Commission) • The warehouses have to be vacated first. This process is ongoing Due to the financial gap UNOPS currently claims ownership of the warehouse facilities. This has to be clarified by UNOPS and UNDP UNOPS An Asset disposal committee should be set up to look Agreed. The loss by way of opportunity cost is very real and merits attention. UNOPS has been seeking ways and UNOPS: In process, Transfer of Monies “Audit of the Afghan Election Project forward to disposal of assets at the earliest with due means of selling / disposing these assets for over a year now. It is to be noted that definite steps have been taken in MEO Afghanistan 2007 17 UNOPS: In process (50%) against 28 vehicles yet needs to be 2004 -2006 consideration cost/ benefit factor arising from the the past in this regards – several assets were sold to other UN agencies through the approval of CAP. UNOPS is confirmed. opportunity cost stated above. also in dialogue with UNDP with regards to finalising a definite process for the sale / disposal of these assets. We are aware of the sunk costs that are being incurred by way of space utilization, security, power, etc., not to mention the depreciation of the assets, and are taking definite action in resolving this. Conclusion Opportunity cost of space utilization of warehouse inventory is estimated to be US $ 396,528 per annum. Prompt disposal of equipment would result in dual benefit of saving of cost incurred for rent of warehouse and generation of income from marketable value of the disposed equipment. Some of the assets (outlined in detail in the report) have been sold in the past to other UN agencies through the approval of CAP, however money is yet to be recovered. UNOPS is also in dialogue with UNDP with regards to finalising a definite process for the sale / disposal of these assets. Way forward - UNDP and UNOPS UNDP UNOPS has to transfer to the Elections Project the value of the 28 Russian Jeeps sold to Earthquake Relief Project. Initially UNDP has requested UNOPS to do the transfer for the agreed 400 Russian Jeeps to be sold. Then, due to the request for only 28 Russian Jeeps, UNOPS was supposed to do the transfer via ATLAS GLJE to UNDP account. 28 Russian Jeeps sold to UNOPS Earthquake Relief Project were not equipped with CODAN HF radios. CAP documents with regards to the Nissan Patrol vehicles sold to UNDP projects mention that the vehicles are equipped with CODAN HF radios and the selling price for the radios is added to the price of the vehicles. Please The Management is recommended to recover the sale refer to the approved CAP documents (made available to audit team) for selling vehicles to SEAL, UDG and GAIN amount and adjust with the Election Project budget. (for this project there is a separate RADT form) projects. Hard copies of all the documents have been provided. UNOPS: In process, Transfer of Monies “Audit of the Afghan Election Project MEO Afghanistan 2007 19 Information on the installation of CODAN system Money resulted from transactions will be accounted for against the Election Project. UNDP is in process of UNOPS: In process (50%) against 28 vehicles yet needs to be 2004 -2006 should be found out to determine the accurate sale recovering the income generated by the sale of vehicles. confirmed. price. UNOPS Recovery / receipt of funds from the projects that these vehicles were sold to is in progress. Project personnel have been contacted and a resolution to this is expected shortly. Both UNOPS and UNDP are working towards this. Funds received will be credited back to the Elections project. Conclusion UNDP and UNOPS have sold the vehicles during the audit period, for which the sale price is yet to be received from the buyers. There is an outstanding of US $ 278,269 to be recovered for the election project as on June 30, 2006. Recovery / receipt of funds from the projects that these vehicles were sold to are in progress. Funds received INDICATOR OF IMPLEMENTATION / REGION COUNTRY AUDIT NAME YEAR RECOMMENDATION # RECOMMENDATION MANAGEMENT COMENTS STATUS PROGRESS UNDP Money resulted from selling of 28 Russian Jeeps to UNOPS has not been transferred to Elections Project. UNOPS e) Sale of 28 Russian Jeeps UNOPS Pakistan The UNOPS Management is recommended to provide UNOPS had informed UNDP of the sale of the 28 Russian Jeeps. Approval by CAP was also requested for by the handover forms for the transferred vehicles. UNOPS and obtained by UNDP. Handover forms will be located by UNOPS and provided to UNDP. Chasis “Audit of the Afghan Election Project Assets handover and transfer documents MEO Afghanistan 2007 20 (e) numbers are available in UNOPS records and can be made available to UNDP for reconciliation purposes. UNOPS: In Process (50% completion). 2004 -2006 provided and accepted by UNDP. Amount pertaining to sale of vehicles should be Recovery of the funds is in progress. Funds received will be credited back to the Elections project. recovered from UNOPS Pakistan Office. Conclusion UNOPS has not provided hand over forms for the transfer of 28 Russian Jeeps to UNOPS Pakistan earthquake response project. We have been informed that handover forms will be located by UNOPS and provided to UNDP and recovery of funds will be credited to the Election project. UNDP Election Project has already donated 7 Toyota Prado and 1 KIA minibus to IEC and transfer was approved by CAP. In addition to that, 3 Hyunday minibuses have been purchased by the Election Project from UNAMA on behalf of Our observation for transfer of Kia Vehicles can be IEC. summarized as following: UNDP senior management approved the transfer of 2 CLJ vehicles to Independent Electoral Commission – IEC on the date of 31/10/2006. In conclusion, the total number of vehicles transferred to IEC HQs Kabul will be 13. IEC on June 1, 2006 whether one vehicle is yet to be transferred to IEC or UNOPS UNOPS: “Audit of the Afghan Election Project Seeking confirmation from UNDP for the 2 MEO Afghanistan 2007 21 not. In Process 2004 -2006 CLJ vehicles UNOPS is in the process of seeking clarification from UNDP on this. total commitment to transfer vehicle to IEC is 12 vehicles (as per letter dated October 20, 2005) or 7 Conclusion vehicles (as per letter dated December 6, 2005). Out of total 13 vehicles to be transferred to IEC, UNDP senior management approved the transfer of 2 CLJ vehicles of the CLJ vehicles to IEC, which is yet to be to IEC on October 31, 2006. However, UNOPS is in the process of seeking clarification from UNDP on the transfer. approved by UNDP Country Director. Way forward - UNDP and UNOPS UNDP and UNOPS to discuss and resolve the transfer. UNDP UNDP senior management approved the transfer of 2 CLJ vehicles to Independent Electoral Commission – IEC on the date of 31/10/2006. In conclusion, the total number of vehicles transferred to IEC HQs Kabul will be 13. Reconciliation of CLJ vehicles “Audit of the Afghan Election Project UNOPS UNDP has yet to deliver documents for the MEO Afghanistan 2007 27 Management clarification is required whether these UNOPS: In Process 2004 -2006 transfer of CLJ vehicles vehicles have to be handed over to IEC or not. UNOPS is in the process of seeking clarification from UNDP on the transfer. Way forward - UNDP and UNOPS UNDP and UNOPS to discuss and resolve the transfer. Sale, reallocation, or transfer of assets to other UNDP projects Sale proceeds on account of sale/ transfer of following equipments is yet to be received from these projects. confirm the selling price. assets transferred to Office of Administrative Affairs. No funds have been received back to the Elections Project. been sold to various UNDP projects - IARCSC, UDG, GAIN, SEAL, LOFTA, for which the money is yet to January 2006 but UNDP received the hard copy list of the sold assets at the end of February 2006 and no be received. supporting documents were attached (PO, disbursement vouchers, RIR). Soft copy of the list of the sold assets was received on 01/04/2006 (please see communication attached). The identification of the assets and establishing of US $ 471,936 have been sold to Office of the correct initial purchase price for both expendable and non-expendable materials took long time. Confirmation and Administrative Affairs, UNOPS APIF, Women's re-confirmation with UNOPS was absolutely necessary. CAP meeting took place on 08/05/2005. Still no handover Dormitory, Ministers office and other projects is US $ form was received by UNDP. Completion of Elections Assets Auction and “Audit of the Afghan Election Project 471,936. However, UNOPS management yet to crediting proceeds to Election Project. Un- MEO Afghanistan 2007 30 UNOPS: In Process (50%) 2004 -2006 confirm the prices and whether these assets have CAP and RADT) and submitted them to UNOPS. They have to agree upon the selling price and provide handover disposed assets handed over to UNDP – with been sold or donated. forms. agreement of UNDP. approved the sale of assets greater than US $ 2500 243,867, UNOPS and UNDP have to compare the information they have against the handover forms for the sold costing US $ 243,867 to various UNOPS projects. assets. UNOPS has to present the handover forms giving full details of the assets sold. However, handover form are yet to be received from the UNOPS management. UNOPS approve the sale of other assets greater than US $ 2500 costing US $ 64,112. UNOPS management yet credited back to the Elections project. to confirm the price and provide handover documents. Funds received will be credited back to the Elections project. transfer of asset as per letter August 23, 2006 signed by Deputy Country Director UNOPS to UNDP stating note that this process was started in Jan 2006 and CAP approval was only obtained in June 2006. The time delay that CAP approval is required for assets sold between between the initiation of the action and the final approval by CAP has resulted in time delays due to additional follow- “Consolidated Report Limited Scope March 15, 2006 and April 30, 2006. The information up and coordination. FIN (Nil In line with the current UNOPS financial regulations, “In the absence of an official pre-financing policy the project managers consulted with the Executive Director who Audit of Certain MSA Project Activities AFO Basin 2007 1 expenditures should not exceed the funds received or made it clear to the Chief of the Global and Interregional Division, Lisa Gomer, that UNOPS was not prepared to in the Nile Basin Countries and Initiative) the authorized budget. close the projects. This is additional to the reasoning given earlier by the current Portfolio Manager. “ Ethiopia” “Consolidated Report Limited Scope FIN (Nil Disbursement vouchers prepared to record payments “Documentation has been provided clearing the above listed vouchers. There appears to have been a paperwork Audit of Certain MSA Project Activities AFO Basin 2007 2 from the imprest account should indicate that the error either at the PMU or with the Imprest Team in NY. The Portfolio Manager has sent a reminder to PMU staff to in the Nile Basin Countries and Initiative) payee has properly received the funds. ensure complete supporting documentation in their Imprest returns. Ethiopia” “Consolidated Report Limited Scope The supporting documentation related to FIN (Nil “Documentation has been provided clearing the above listed vouchers. There appears to have been a paperwork Audit of Certain MSA Project Activities disbursement vouchers for the purchase of AFO Basin 2007 3 error either at the PMU or with the Imprest Team in NY. The Portfolio Manager has sent a reminder to PMU staff to in the Nile Basin Countries and goods/services should bear an indication that the Initiative) ensure complete supporting documentation in their imprest returns. Ethiopia” goods/services have been properly received/rendered. INDICATOR OF IMPLEMENTATION / REGION COUNTRY AUDIT NAME YEAR RECOMMENDATION # RECOMMENDATION MANAGEMENT COMENTS STATUS PROGRESS The contradiction between the various UNOPS “Consolidated Report Limited Scope FIN (Nil guidelines and directives with regard tot eh Audit of Certain MSA Project Activities AFO Basin 2007 4 submission of original invoices to support No response provided in the Nile Basin Countries and Initiative) disbursement vouchers should be addressed and Ethiopia” clarified. “The original implementation arrangement for this project called for 11 staff. In 2005 the project was staffed by 4.5 full time staff. Due to the difficult financial situation within UNOPS up to four interns at a time were used by this project in an effort to maintain standards in implementation. However, management decisions were made by the “Consolidated Report Limited Scope FIN (Nil The project‟s financial activities should be properly executive office to continue operations despite lack of funding to fully staff the project. Audit of Certain MSA Project Activities AFO Basin 2007 5 monitored in order to identify any errors and make the in the Nile Basin Countries and Initiative) necessary corrections in a timely manner. Under the new arrangement implemented in mid 2006 there are 10 staff dedicated 100% to his programme. The Ethiopia” cleanup of the projects is expected to take through early 2007 at which point we do not foresee such monitoring issues that were caused by short staffing.” Management Comments: “AFO had recognised these deficiencies in the procurement section of ESARO and as such had taken action in early 2007. A (P5) retiree procurement expert has been recruited under a CA as of 21 March 2007, to address these deficiencies. a) The ESARO LPC TOR stated that all procurement actions over $2,500 are to be reviewed by the LPC. This was an additional layer of oversight implemented by ESARO and not required by UNOPS procurement rules and The procurement process should be improved to regulations, which only requires LPC review for procurement actions of $30,000 or more. All cases as observed by consider internal controls in the following areas: (a) the audit team were well below the $30,000 threshold and were urgent requirements. For urgent cases the ESARO proper use of the LPC to review all procurement a.) Training to be completed 31 August Limited Scope Audit of the UNOPS Operations Officer reviewed the procurement action and presented the specific case to the PA, who again reviewed AFO 2007 1 actions according to its TOR, (b) properly 2007 and then on a periodic basis for new Africa Office (AFO) -PSAS and approved the award based on the recommendation. Such approvals were within the DOA of the PA and did not documenting the evaluation of bids, and (c) staff; b) immediate; c) immediate contravene the UNOPS internal framework. AFO has submitted a request for the establishment of an LCPC which performing background checks on prospective new will supersede the LPC TOR. The proposed LCPC members are currently observing HQCPC meetings to ensure a suppliers. better understanding of their obligations and procurement training is being undertaken by AFO to all staff involved in any stage of a procurement exercise, as detailed by OEC below. b) This observation is noted and has been enforced with immediate effect. c) This observation is noted and is being enforced with immediate effect. The procurement expert is currently compiling a vendor roster and is conducting background checks for all. All awards are now only being conducted after a background check has is still completed”. “Noted. The Job Fair process been yet to be completed for the KEOC Procurement Associate and the AFO OC Finance Sections. Some temporary measures have been put in place in key areas while the job fair is being concluded to minimise the risk of material errors being made and the potential for finance and procurement mismanagement. These measures are: recruitment of an expert procurement consultant (CA), re-assignment of an KEOC staff with procurement knowledge and experience in a temporary Procurement Assistant function to provide The new organizational structure for the AFO should additional “in house” procurement training, recruitment of a KEOC Finance Assistant consultant (TA) (with UNDP Limited Scope Audit of the UNOPS be implemented as soon as possible and the experience), recruitment of a temporary (TA) KEOC Operations Manager until the recruitment process of the post AFO 2007 2 End of July 2007 Africa Office (AFO) -PSAS necessary staff recruited to fully support the offices‟ was completed (completed 1 June). activities. The Organization has significantly met, with limited human resource personnel, concurrent recruitment of headquarters positions and regional job fairs for the North America, Africa and Asia regions and Finance Division in addition to recruitment for major new and all existing projects globally. 23 posts were advertised, a number of applications received, reviewed, short listed and processed through the selection processes of interviews and Appointment and Promotions Board. Headquarters directly supported the Africa Regional Office (AFO) by sending Human Resource personnel on mission to the AFO to assist its international and local recruitment activity. Where positions could not be filled by selected applicants or advertisement failed to secure suitable candidates, Operationally closed projects should be financially 31 August 2007 for priority pending projects, Limited Scope Audit of the UNOPS closed within 12 months of their operational closure. “ Noted. AFO (KEOC) has established a project closure task force to address all projects that are pending closure 30 September for lower priority pending AFO 2007 3 Africa Office (AFO) -PSAS The AFO management should also address the and to ensure closure procedures are carried out and completed in a timely manner.” projects and continuous timely closure of underlying causes of the delays. others “Noted and agreed. Expenditure should not be incurred in excess of approved budgets. The current Portfolio Managers are closely monitoring expenditure against budgets. The UNOPS Dashboard has become a useful tool in 31 July 07 for specified instances above (Pending Expenditure should not be incurred in excess of this regard as will the AFO dashboard currently being developed. Some instances have occurred due to insufficient signing of Budget Revisions by clients & Certified Limited Scope Audit of the UNOPS approved budgets. Additionally, the AFO communication between AFO and HQ Finance; this has been addressed through the recruitment of a new RFM and Financial Statements from Finance HQ), and AFO 2007 4 Africa Office (AFO) -PSAS management should address the issue of significant the soon to be implemented Online Request Tracking System being developed by AFO. immediate effect for no additional expenditure adjustments resulting in credit balances. The instances above are being actioned by AFO to rectify the situation immediately. above approved budgets without appropriate The AFO RD has instructed AFO PMs to adhere to the UNOPS advance financing policy where applicable.” approval. Limited Scope Audit of the UNOPS The imprest accounts should reflect their new status “There have been changes to names and acronyms of UNOPS offices worldwide. This has now been completed 31 July 2007 – All Imprest accountswill be AFO 2007 5 Africa Office (AFO) -PSAS as the accounts for the AFO. and a request for change in the imprest title will be requested by the AFO RFM.” close in 2008 “Noted. Already there has been a significant increase in the use of ATLAS and a decrease in the use of the imprest Further significant reductions by 15 July account. Through this, AFO has managed to reduce the overall imprest monthly level by $800,000. (Somalia Operations through Money The imprest account also serves operations in Somalia, where there is no formal banking system in place and cash Dealers to be effected through ATLAS); The imprest accounts should operate at the lowest payments are required to be made through UN-approved money dealers. KEOC is currently working with these Additional reductions upon recruitment of Limited Scope Audit of the UNOPS AFO 2007 6 possible levels given the availability of Atlas to money dealers to make payments to them through ATLAS to an internationally-recognized bank account; this will Finance Assistant to manage vendor Africa Office (AFO) -PSAS process payments. again significantly reduce the use of imprest accounts. processing – 15 August 2007; On going AFO will change for a new system (UNOPS accounts that allow to use a “Imprest system” in a online base with the reduction for requirement of Imprest ATLAS system Account. During 2008 all Imprest accounts will be close. Regularised by 31 July 2007. All imprest accounts are reconciled in a monthly basis The reconciliation of the imprest bank accounts Limited Scope Audit of the UNOPS “Noted. In mid April 2007 KEOC recruited a temporary Finance Assistant with relevant expertise and knowledge to in the Regional Office and a GL AFO 2007 7 should be performed by someone other than the Africa Office (AFO) -PSAS strengthen the section pending finalization of the job fair process. AFO RFM recruited 3 June 2007.” reconciliation was beam completed at the individual responsible for preparing the payments. HQ level. In 2008 will reconcile at the AFO level. “Noted. Already there has been a significant increase in the use of ATLAS and a decrease in the use of the imprest Further significant reductions by 15 July account. Through this AFO has managed to reduce the overall imprest monthly level by $800,000. (Somalia Operations through Money The imprest account also serves operations in Somalia, where there is no formal banking system in place and cash Dealers to be effected through ATLAS); payments are required to be made through UN-approved money dealers. KEOC is currently working with these Additional reductions upon recruitment of Limited Scope Audit of the UNOPS The AFO should increase the usage of Atlas to AFO 2007 8 money dealers to make payments to them through ATLAS to an internationally-recognised bank account, this will Finance Assistant to manage vendor Africa Office (AFO) -PSAS process its financial transactions. again significantly reduce the use of imprest accounts. processing – 15 August 2007; On going AFO will change for a new system (UNOPS accounts that allow to use a “Imprest system” in a online base with the reduction for requirement of Imprest ATLAS system Account. During 2008 all Imprest accounts will be close. The stipulations of the Assets Management Guidelines should be fully implemented at the AFO, “Noted. AFO has recognized that there were deficiencies in the ESARO asset management in early 2007 and action Limited Scope Audit of the UNOPS specifically with regard to the preparation of complete has already been initiated to rectify this. In March 2007 AFO issued an RFP for asset recording, decaling and AFO 2007 9 15-Jul-07 Africa Office (AFO) -PSAS and accurate inventory records, the proper costing of AFO assets. Bids have been received and evaluated and the contract is expected to be awarded by 15 identification of assets and the undertaking of an June 2007.” annual physical count of non-expendable property. INDICATOR OF IMPLEMENTATION / REGION COUNTRY AUDIT NAME YEAR RECOMMENDATION # RECOMMENDATION MANAGEMENT COMENTS STATUS PROGRESS AFO RFM – completed 3 June 2007; “Noted. With the recruitment of the new AFO RFM (effective 3 June 2007) and the full staffing of KEOC Finance Staffing of KEOC Finance Section – 31 July Coordination between the AFO and the finance unit at Section the situation will improve. AFO is also developing coordination and communication initiatives to improve the Limited Scope Audit of the UNOPS 2007; Online Request Tracking System – AFO 2007 10 headquarters should be improved, particularly with situation such as an online Request Tracking System whereby all requests to FIN by AFO will be logged on a Africa Office (AFO) -PSAS Pilot in KEOC 30 June 2007 and roll out to regard to project budget and expenditure reporting. system on the intranet; this will allow for improved follow up and monitoring of communications between AFO and interact between AFO and HQ by 31 July HQ. Also AFO is developing a “Dashboard” to monitor delivery, income and revenue.” 2007; AFO dashboard 15 July 2007 In collaboration with UNDP and other Atlas partners, In coordination with UNDP and UNFPA the FIN (Nil Limited Scope Audit of the the configuration of inter and intra module “We agree with the recommendation. The configuration of inter and intra module reconciliations in Atlas is included requirements for improved controls will be AFO Basin Division of Finance and Administration 2006 4 reconciliations in Atlas should be implemented in Not yet started in the deliverables of Atlas Wave 2 implementation.” included as part of the Atlas Wave II Initiative) order to regularly ensure the completeness, accuracy implementation and correctness of Atlas data. The practice of purchasing equipment for leasing to Limited Scope Audit of the other projects should be reviewed and a related “UNOPS agrees with this recommendation. A detailed review of operations with a view to ensuring current Policy on “buy and lease” to be developed and MEO Afghanistan Afghanistan programme 2006 8 Not implemented business policy should be established to cover this procedures are adequate will be carried out in 2006.” posted into AGOC SOP implementation facility method of operation. “1. Para ii There may have been difficulties in communication during the war in Côte D‟Ivoire where UNOPS office was based until June 2003. However the situation improved when WCARO moved to Dakar in June 2003. Specific recommendations were made by UNOPS Portfolio Manager to improve channels of communication between UNDP/UNOPS/Projects during a monitoring mission to Banjul undertaken in February 2005. 2. Para iv UNOPS will reply to the letter when sending the audit report since the audit was undertaken specifically to address issues raised by the Government. The reply should be submitted to the UNDP resident 3. Para 10 representative in The Gambia for issuance to the The responsibility to manage the project was given to UNOPS Africa II Division in Abidjan since the onset of the Government. A detailed reply to the government letter Full scope audit of the UNOPS project in 2002 as part of the decentralization process. of 1 November 2005 and the subsequent government execution of the UNDP project 4. Para 14 Detail letter has been prepared and is ready AFO Gambia 2006 1 communication on the matter should be prepared by Execution of solution as indicated in column 3 "Establishment of a National It should be stated that UNOPS did not participate to the meeting because it was not invited. for signature and dispatch. the UNOPS regional office in accordance with the Environment youth corps" 5. Para 17 comments contained in this audit report. The reply The proforma cost for the CTA post was underestimated in the prodoc as it was for one individual without should be provided to the Government through the dependents. The actual cost turned out to be much higher as the incumbent of the post had 4 dependents of which UNDP resident representative in Gambia. 3 were entitled to education grant. UNOPS requested UNDP‟s approval of the higher amount before finalizing the CTA‟s recruitment. 6. Para 41 UNOPS PAC identified the issue of resource mobilization as a risk that may disrupt project implementation in case pledges indicated in the prodoc are not materialized. In addition with the pressure from the highest level of Government to start project activities, UNDP gave an advance authorization to UNOPS before the incorporation of the initial budget in the financial system”. “In this case, UNDP fast-tracked the approval process of the prodoc, which did not facilitate any amendments wished by UNOPS. Given the urgency and the pressure from Government officials as conveyed by UNDP, UNOPS accepted the project document though it was not involved in the formulation and appraisal and authorized UNDP RR For future activities and as a matter of lessons Full scope audit of the UNOPS to sign on its behalf. learned, care should be taken when preparing a execution of the UNDP project Since 2001 when this project was accepted, UNOPS has streamlined its procedure for project acceptance including Project Manager to supervise corrective action as AFO Gambia 2006 2 sound and comprehensive project document. Ongoing: No repeat of the issue. "Establishment of a National decentralization to regional offices. Measures have been taken to reject projects that don‟t meet our requirements indicated. Environment youth corps" particularly when they have already been signed, to encourage donors to associate UNOPS as much as possible in the formulation stage and UNDP Project Appraisal/Approval Committee and to ensure UNOPS PAC comments are addressed before project implementation starts”. MAU/NAO proceeded with the following. All vendors currently on file with the UNOPS NAO MAU (who have either won contracts or been approached in the past for RFPs) have been contacted and asked to submit documentation For proper vendor management and maintenance of indicating what capabilities / capacities they will be interested in providing or bidding for during 2008-2009. the vendor database, we recommend the following: Any company that has approached the MAU since this invitation was made has also received the same invitation. • Establish a process, including setting criteria or Vendor management is a major task/activity. It benchmarks for the comprehensive evaluation and Furthermore, a EOI has been posted on the UNOPS website for provision of services for the Sudan programme and has been agreed that the OEC centre of UNOPS screening of vendors to be included in the vendor file. a similar EOI will be posted in April 2008 for global provision of mine action capabilities. will start developing a corporate vendor management system in the last quarter of 2007. In Limited scope audit of the Mine Action • Establish a vendor performance feedback A minimum standard of technical expertise and competence for each area of potential service provision has been the mean time a supplier performance evaluation HQ - New This will depend on the vendor management NAO procurement activities of the global & 2006 1 mechanism for recording in the vendor file, which indicated in the approach made to the companies/NGO‟s reflecting the requirements of the International Mine form has been developed. Procurement staffs York system that will be put in place interegional division (GLO) could be accessed by all procurement practitioners. Action Standards (IMAS). have been instructed to include it in all new The same mechanism may be used to disseminate procurement case files and to fill it in at the end of information on “blacklisted” vendors. Vendor performance montioring is now part of the monthly reporting requirements included in all current and future the procurement process. One person at GSC is contracts. Payments for services are dependant upon satisfactory performance and confirmation on this from the also collecting this information for all procurement • Carry out a regular periodic review of the vendor file field. activities conducted by UNOPS for updating vendor information and purging obsolete data. A full review of vendors‟ performance and available vendors will take place annually. The information obtained through such substantive performance reviews will be reflected in the vendor database. Also, NAO.MAU will proceed with an annual EOI posted on the UNOPS website. In Progress (not fully implemented as per Limited scope audit of the Indonesia Audit IDOC): POs created and approved in We recommend that the designated Atlas budget Agreed. Jakarta and programme implementation facility and owner for the Schools Reconstruction project should The Portfolio Manager in APRO is now responsible for this exercise and shall perform the function as All expenditures in 2007 will be made on the basis Bangkok. Finance Officer with an ATLAS APO Banda Aceh, the "Schools reconstruction and 2006 9 background was recruited in June 2007. closely control and monitor expenditures, particularly recommended. Past expenditures have been carefully reviewed and validity of POs is currently being ascertained. of Atlas approved Pos Indonesia refurbishment project" financed by With imprest operation unde ATLAS, the validity of outstanding POs or encumbrances. UNICEF. monitoring of expenditures was gratly improved in 2008. On-going:Contracts officer was recruited in mid 2007 and has been setting up database Apart from the Database Consultant and Officer of contracts. HR team has also updated all under recruitment above in 13. The position of records and have created an improved record Limited scope audit of the Indonesia Agreed. We recommend that proper records management contracts officers have been created in every Field management, particularly with Jakarta and programme implementation facility and The new project management has been trying hard to set up adequate record management for the entire project, procedures be instituted, taking into account the Office and a NO position at the level of the PMU in commencement of ICA in January 2008. A APO Banda Aceh, the "Schools reconstruction and 2006 14 including field offices, in line with the respective OD. Recruitment of personnel for this purpose, as anticipated in general principles outlined in the UNOPS Banda Aceh to ensure that records management decision has been reached about a budget Indonesia refurbishment project" financed by the revised PIP, is underway and is expected to be completed in early 2007. organizational directive on records retention. is done properly at the field level while for record management but UNICEF must UNICEF. consolidating it at the Banda Aceh PMU to decide what documents need to be handed- facilitate accessibility and retrieval of these records. over at the end of the project for the archive in accordance with UNICEF's OD for records retention. INDICATOR OF IMPLEMENTATION / REGION COUNTRY AUDIT NAME YEAR RECOMMENDATION # RECOMMENDATION MANAGEMENT COMENTS STATUS PROGRESS The management should ensure that all requirements of the ProDoc and Contract with the Consultant are carried out in order to avoid future disputes with the various stakeholders i.e. Government of Timor-Leste, UNDP, and EC who may scrutinize the specific requirements of the ProDoc to determine compliance. Ongoing Programme for access improvements If work was not carried out, adequate measures The comment well noted. Since the Contract with the Consultant is still active, Management will urge the Consultant APO will work closely with NOD to ensure the said The assessment result is undertaken and APO Timor-Leste to markets in the eastern region 2006 8 should be taken to deduct the cost of performing the to conduct this Environmental Impact Assessment as part of impact assessment and include the result into the assessment is done during the Phase III of the results are included into the Progress Report ("AIM") omitted requirements from the payments made to the Progress Report of Phase III of the Contract. Contract of Phase III of the Contract. Consultant. Alternatively, the ProDoc should be revised accordingly if it is determined that an EIA is not required to be carried out and a waiver should be formally issued to the Consultant. Limited scope audit of the UNOPS The Agreement should be amended to reflect the IFAD considers that it is not necessary to implementation of the programme issues raised in this report with regard to the establish such amendment because the project Dakar, "Western and Central Africa Rural “UNOPS agrees with the recommendation and will discuss with IFAD on both issues in September 2006 when the IFAD will send a letter to UNOPS explaining AFO 2006 1 following: a) clearly stating the role of UNOPS, and completion date is scheduled for December 31, Senegal Development HUB, a tool for improved next mission is scheduled”. the case. b) clarifying the audit responsibilities. 2007. This issue will be discussed during the next food security and rural poverty Steering Committee meeting. alleviation" (HUB) Limited scope audit of the UNOPS IFAD considers that it is not necessary to The Agreement should be amended to reflect the implementation of the programme establish such amendment because the project Dakar, issues raised in this report with regard to the “UNOPS agrees with the recommendation and will discuss with IFAD on both issues in September 2006 when the IFAD will send a letter to UNOPS explaining AFO "Creating a regional information 2006 1 completion date is scheduled for December 31, Senegal following: a) clearly stating the role of UNOPS and b) next mission is scheduled.” the case. network in Western and Central Africa 2007. This issue will be discussed during the next clarifying the audit responsibilities. -Phase II" supervision mission in April 2007. Limited scope audit of the UNOPS The Agreement should be amended to reflect the implementation of the programme “UNOPS agrees that the obligation to collect monies from each IFAD project should be reviewed. In fact this has Dakar, cancellation of UNOPS obligation to collect the AFO "Creating a regional information 2006 3 already been discussed and it is expected that changes will be made to the agreement in the next mission to be IFAD accepted to withdraw this obligation. IFAD will send a letter to UNOPS. Senegal US$2,000 yearly contribution from IFAD projects in network in Western and Central Africa performed in September 2006.” the region. -Phase II" Management Comments: “UNOPS agrees that the over expenditure needs to be resolved but feels that whilst the As a matter of priority, UNOPS should resolve with reasons for the over expenditures have been clearly reported in the audit report as resulting from non compliance of the UNDP Mozambique office the issue of the over- the officers responsible for project management there is no comment on whether the non compliance was due to expenditure, which should include dealing with the negligence on the part of the UNOPS staff or other factors. Given that the audit was made a the request of the Limited scope audit of the UNOPS following significant factors: (a) effect, if any, of donor UNOPS Deputy Executive Director based on discussions with the UNDP office in Mozambique and given the Final review of the bud/revs and workplans Maputo, execution of the UNDP project contributions of US$236,684 kept by the UNDP seriousness of the alleged actions, it is suggested that the audit team consider further investigation of the matter. In indicating authorized budget against actual AFO 2006 1 Ongoing Mozambique "Support to the police of the Republic Comptroller office in a holding account under this connection since those responsible are now employed by UNDP, and since the audit was partly a result of expenditure - following review of PO of Mozambique" MOZ/95/015, and (b) discrepancy on the calculation discussions with UNDP, internal audit should carry out any additional work with the agreement of UNDP. balances cancellations. of the UNOPS support cost as stated between the donor agreement with the Government of Spain and Regarding a) above, as a core funded project, UNOPS receives authorized budget and not cash. Therefore OAPR the Project Document. may wish to review this point with the assistance of UNDP. As regards point b) the total budget authorization and revisions prepared and approved by UNDP appear to be in line with the total contributions received by UNDP less Limited scope audit of the UNOPS Efforts should be made to recover from the UNDP‟s management fee. Therefore, if there are discrepancies, OAPR may wish to further investigate with the Maputo, execution of the UNDP project Government of Mozambique the value of the “UNOPS agrees with the audit recommendation. ARO will follow up with the Government of Mozambique and Discussions with UNDP MOZ and AFO 2006 2 Ongoing Mozambique "Support to the police of the Republic demurrage cost that was advanced by the project. UNDP Mozambique.” agreement on receipt of $42,277. of Mozambique" ($54,000) Limited scope audit of the UNOPS The issue of whether to continue or terminate the Discussions with UNDP MOZ and UNOPS Maputo, execution of the UNDP project “UNOPS agrees with the audit recommendation. ARO will seek the advice of OLS and the assistance of UNDP AFO 2006 3 contract with the firm ABACO should be resolved in Ongoing and decision and agreement on remainder Mozambique "Support to the police of the Republic Mozambique in deciding the course of action to be followed.” consultation with the Office of Legal Services. of works to be done and contractor of Mozambique" Limited scope audit of the UNOPS Maputo, execution of the UNDP project Efforts should be made to financially close the project “UNOPS agrees with the audit recommendation and action will be taken based on the outcome of the above AFO 2006 4 Ongoing UNOPS Finance to advise and confirm. Mozambique "Support to the police of the Republic MOZ/00/007. recommendations.” of Mozambique" Under the project MOZ/95/015, the difference between the total donor contributions shown in the “As noted above, as a core funded project, UNOPS receives authorized budget and not cash. Therefore OAPR Limited scope audit of the UNOPS final budget revision with that shown in the records of may wish to review this point with the assistance of UNDP”. Maputo, execution of the UNDP project the UNDP Comptroller office should be reconciled, as AFO 2006 5 Ongoing UNOPS Finance to confirm/advise Mozambique "Support to the police of the Republic a matter of priority. In particular, the reconciliation OAPR does not agree with the UNOPS management comments and, in this regard, is maintaining the audit of Mozambique" should take into account the amount of $236,684, recommendation. Please refer to the OAPR response to the management comment, as shown in the final report. which is being kept in a holding account by the UNDP Comptroller office “As noted above, as a core funded project, UNOPS receives authorized budget and not cash. In addition, the total budget authorization and revisions prepared and approved by UNDP appear to be in line with the total contributions In line with efforts to financially close the project Limited scope audit of the UNOPS received by UNDP less UNDP‟s management fee. Therefore, if there are discrepancies, OAPR may wish to further MOZ/00/007, the total donor contributions shown in UNDP to confirm total donor contributions Maputo, execution of the UNDP project investigate with the assistance of UNDP”. AFO 2006 6 the UNDP Mozambique office budget revision should Ongoing UNOPS to check the budget received was Mozambique "Support to the police of the Republic be taken into account by UNOPS in preparing a final correctly inputted in Atlas. of Mozambique" OAPR does not agree with the UNOPS management comments and, in this regard, is maintaining the audit budget revision. recommendation. Please refer to the OAPR response to the management comments, as shown in the final report. For future activities similar to the SCA sub-contract, a “APIF agrees. APIF likes to note that the problems with SCA on this issue were recurrent in nature and given the written agreement should be entered into to cover the tripartite relationship between UNDP as the repository of strategy and direction and SCA for implementation with Since 2006, all projects have a signed Financial audit of the Afghanistan MEO Afghanistan 2005 9 sub-contracting activities, and expenditure should only UNOPS caught in the middle – a decision was made to end this programme – turning over execution to UNDP in Ongoing (pending suppoort documents) agreement and have an IAN approved implementation facility be incurred on the basis of the terms of the said 2004 to reduce potential for continued problems of this nature. We do however; recognize the principle applies to all through Regional Office. agreement. activities - not just SCA.” “The first amendment to the original Delegation of Authority dated 13 August 2003 to Mr. Ecran Muran, Country Director, UNDP Afghanistan and Mr. Gary Helseth, Country Coordinator & Programme Manager, specifies that „Mr. Helseth will be requested to submit a regular monthly report on all subcontracts approved.‟ The previous Director of Operations approved this delegation on the condition that the Country Coordinator/Programme Manager be required to submit a regular monthly report on all subcontracts approved. The requirement for the APIF to submit monthly The subsequent amendment to the delegation of authority dated 19 April 2004 to the Country Coordinator, the contracting reports to headquarters should be clarified Financial audit of the Afghanistan Officer-in-Charge and the alternate Officer-in-Charge increases the level of delegation to the recipients for the Will be implemented when we enter into new MEO Afghanistan 2005 10 on the basis of risk and should include, inter-alia, a Not Implemented implementation facility procurement of local goods totaling US$30,000 or more but less than US$100,000. This delegation continues the arrangements of similar nature clear definition of the purpose of the review and the previous reporting requirement that the recipients of the delegation holders must „submit on a monthly basis a report responsibilities of the recipient of said reports. on all contracts and subcontracts approved of over US30,000 or more but less than US 100,000.‟ While it is unclear why the previous Director of Operations originally wished that the Country Coordinator send monthly reports, it can be assumed it was for control purposes, to ensure compliance of procurement procedures designed to ensure transparency, fairness as well as best value for money for procurement actions under the Afghanistan office. At the time the delegations were issued, Siamak Moghaddam was the Project Manager in UNOPS Headquarters managing and coordinating many of the Afghanistan projects. It appears that Siamak INDICATOR OF IMPLEMENTATION / REGION COUNTRY AUDIT NAME YEAR RECOMMENDATION # RECOMMENDATION MANAGEMENT COMENTS STATUS PROGRESS It should be ensured that the operation of the national steering committee in Brazil is in line with the Guidelines, particularly in the following aspects: Partially Implemented. SGP-Operational a) members should be formally appointed by the Guidelines were updated and provided to SGP- UNDP Resident Representative; Brazil for corrections. However, under b and c. NC Operational Guidelines updated. NSC “Agree with a) b) and c) it is the responsibility of the National Coordinator to ensure each member of the NSC is provided long comments stating “It has not been UNOPS execution of the "GEF Small b) any member of the national steering committee membership dependant on GEF decision of NAO Brazil 2005 8 endorsed first by the SGP Global Manager before appointment by the RR. SGP CPMT is reviewing Operational possible to fully implement changes in NSC Grants Programme" Project in Brazil. from the NGO sector, academic and scientific SGP-Brazil RAF status / clarification by Guidelines including rules and tenure for NSC membership.” composition, tenure and appointment because institutions, other civil service organizations, should CPMT. GEF has not formally approved continuity of the be appointed to serve in her/his personal capacity and program in Brazil.” Clarification is required by not as a representative of her/his organization; CPMT. c) the practice of considering the tenure of members to be “indefinite” should be discontinued and the “two year rule” should be generally used as a yardstick. “We agree with the recommendation. FIN, which is responsible for approving in Atlas UNOPS FIN policy is that budget revisions should be processed in Atlas within 3 working days on receipt of an UNOPS implementation of World FIN (Nil project budget revisions and realignment, should approved budget with correct chart of account lines and supporting client documents. Delays are caused when the Bank funded Project activities under AFO Basin 2005 4 ensure that the posting of the approved project documentation received is not approved and the chart of account lines incomplete. One should note that Atlas certain management services Initiative) budget revisions are kept up-to-date based on budget checking operates at a donor and fund level, and that the World Bank requires expenditures to be within agreements (MSA) requests of the respective portfolio manager. budget at the category level not budget line level. Finance intends in 2006 to decentralize to the Regional Finance Officers the review of budget revisions and Atlas approval of those revisions. This should expedite the posting of budgets and budget revisions in Atlas.” “ESARO uses ATLAS to the maximum extent possible, however in a situation such as Somalia where there is no banking system, it is necessary to use the imprest system and banking agent to make payments.” The processing of project disbursement documents OAPR Clarification: UNOPS implementation of IFAD should be streamlined for a more efficient use of funded project activities under certain AFO 2005 3 UNOPS resources. The feasibility of processing We recognize, as indicated in paragraph 19, first bullet, and 20 above, the need for the banking agent [i.e., Omar management services agreements project disbursements directly into Atlas by ESARO International Company (Omar)] contracted by UNOPS to handle all the cash payment transactions for the project. (MSA) should be considered We wish to clarify, however, that our recommendation refers, in particular, to the payments made to Omar that were processed through the imprest system instead of directly into Atlas. UNOPS execution of UNDP project "Conservation de la diversite The project budget should be revised to take full biologique par la rehabilitation Mauritanie account of cost sharing contributions received, “UNOPS manages only the cash contribution of UNDP-GEF and the Government of Netherlands. However, the next AFO participative des sols degrades dans 2005 1 In process and Senegal including a disclosure of the in-kind contribution budget revision will reflect the update of on-kind contributions as recommended.” les zones arides et semi-arides arrangements. transfrontalieres de la mauritanie et du Senegal". UNOPS execution of UNDP project "Conservation de la diversite We reiterate our recommendation in the 2004 audit biologique par la rehabilitation report that, as a matter of priority, the requirement for Mauritanie AFO participative des sols degrades dans 2005 3 an annual external audit by an independent auditor “Noted action will be taken.” In process and Senegal les zones arides et semi-arides should be clarified with the counterpart office of transfrontalieres de la mauritanie et du UNDP and with the donors. Senegal".