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Could Be Strengthened by Further Instituting International Best 
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Report to Congressional Committees: 

June 2007: 

United Nations Organizations: 

Oversight and Accountability Could Be Strengthened by Further 
Instituting International Best Practices: 

GAO-07-597: 

GAO Highlights: 

Highlights of GAO-07-597, a report to congressional committees 

Why GAO Did This Study: 

Since 2005, the United Nations (UN) has been attempting to reform its 
management processes, in part to help ensure that resources are used 
effectively and efficiently. Some of these reforms focus on improving 
oversight and accountability at the United Nations. In this report, GAO 
examines the extent to which selected UN organizations’ (1) internal 
audit offices have implemented professional standards for performing 
audits and investigations, (2) evaluation offices have implemented UN 
evaluation standards, and (3) governing bodies are provided with 
information about the results of UN oversight practices. GAO obtained 
and analyzed international standards and relevant documents from six of 
the largest UN organizations, and also met with U.S. and UN officials. 

What GAO Found: 

Although the six UN internal audit offices that GAO reviewed have made 
progress in implementing international auditing standards, they have 
not fully implemented key components of the standards. The 
organizations lack completed organizationwide risk-management 
frameworks, which are essential in identifying the areas with the 
greatest vulnerability to fraud, waste, and abuse. In addition, three 
audit offices lack sufficient staff to cover high-risk areas of the 
organization. Furthermore, some of the audit offices have not fully 
implemented quality assurance processes, which include activities such 
as external peer reviews. Some of the organizations also do not have 
professional investigators to probe allegations of wrongdoing. 

While the six UN evaluation offices that GAO reviewed are working 
toward implementation of UN evaluation standards, they have not fully 
implemented them. Most of the evaluation offices lack sufficient 
resources and appropriate expertise to manage and conduct evaluations, 
especially at the country level. This has impacted their ability to 
conduct high-quality and strategically important evaluations. In 
addition, most of the evaluation offices have not fully implemented 
quality assurance processes relating to areas such as evaluation 
methodology, scope, evidence, and findings. Furthermore, all of the 
evaluation offices are working toward fully establishing mechanisms 
that systematically follow up and report on the status of their 
recommendations. 

The governing bodies responsible for oversight of the six UN 
organizations that GAO reviewed lack full access to internal audit 
reports and most lack direct information from the audit offices about 
the sufficiency of their resources and capacity to conduct their work, 
which could provide greater insights into the organizations’ operations 
and identify critical systemic weaknesses. In addition, with one 
exception, the organizations’ audit committees that GAO examined are 
generally not accountable to their governing bodies, and some are 
composed of senior management officials. 

Figure: Differences in UN Organizations' and IIA's Best Practices 
Accountability Structures: 

[See PDF for Image] 

Source: GAO analysis of UN data and Institute of Internal Auditors' 
guidance. 

[End of figure] 

What GAO Recommends: 

GAO recommends that the Secretary of State direct the U.S. Missions to 
work with member states to improve oversight in UN organizations by (1) 
making audit reports available to the governing bodies and (2) 
establishing independent audit committees that are accountable to their 
governing bodies. GAO received written comments from State, FAO, UNDP, 
WFP, and WHO indicating that they generally agreed with GAO’s 
recommendations. However, ILO and UNICEF expressed concerns about 
implementing GAO’s recommendations. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-597]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Thomas Melito at (202) 
512-9601 or melitot@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

UN Internal Audit Offices Have Not Fully Implemented Key Components of 
International Auditing Standards: 

UN Evaluation Offices Have Not Fully Implemented UN Evaluation 
Standards: 

Governing Bodies Lack Full Access to Information That Could Provide 
Greater Insights into UN Organizations' Operations and Identify 
Critical Systemic Weaknesses: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Scope and Methodology: 

Appendix II: Comments from the Department of State: 

Appendix III: Comments from the Food and Agriculture Organization: 

Appendix IV: Comments from the World Food Program: 

GAO Comment: 

Appendix V: Comments from the World Health Organization: 

GAO Comments: 

Appendix VI: Comments from the International Labor Organization: 

GAO Comments: 

Appendix VII: Comments from the United Nations Development Program: 

Appendix VIII: Comments from the United Nations Children's Fund: 

GAO Comments: 

Appendix IX: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Figures: 

Figure 1: Governance Structure of Selected UN Funds and Programs and 
Specialized Agencies: 

Figure 2: Internal and External Oversight Structure of Selected UN 
Funds and Programs and Specialized Agencies: 

Figure 3: Selected UN Funds' and Programs' and Specialized Agencies' 
Progress toward Implementing International Auditing Standards: 

Figure 4: Selected UN Funds' and Programs' and Specialized Agencies' 
Progress toward Ensuring Sufficient Resources to Perform 
Investigations: 

Figure 5: Selected UN Funds' and Programs' and Specialized Agencies' 
Progress toward Implementing Financial Disclosure and Whistleblower 
Protection Policies: 

Figure 6: Selected UN Funds' and Programs' and Specialized Agencies' 
Progress toward Implementing UNEG Standards and Norms: 

Figure 7: Audit Committee Purpose, Membership, and Responsibilities 
According to Best Practices: 

Figure 8: Differences between Current Practice for Most of the UN 
Organizations and IIA's Best Practice Accountability Structure for 
Audit Committees: 

Figure 9: Audit Committees at the Six UN Organizations That We 
Examined: 

Abbreviations: 

ALNAP: Active Learning Network for Accountability and Performance in 
Humanitarian Action:: 

BOA: Board of Auditors: 

FAO: Food and Agriculture Organization: 

IIA: Institute of Internal Auditors: 

ILO: International Labor Organization: 

IT: information technology: 

JIU: Joint Inspection Unit: 

OECD/DAC: Organization for Economic Cooperation and Development/ 
Development Assistance Committee: 

OIOS: Office of Internal Oversight Services: 

PBAC: Program, Budget and Administration Committee: 

UN: United Nations: 

UNDP: United Nations Development Program: 

UNEG: United Nations Evaluation Group: 

UNICEF: United Nations Children's Fund: 

WFP: World Food Program: 

WHO: World Health Organization: 

June 18, 2007: 

The Honorable Norm Coleman: 
Ranking Member: 
Permanent Subcommittee on Investigations: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

The Honorable Ileana Ros-Lehtinen: 
Ranking Member: 
Committee on Foreign Affairs: 
House of Representatives: 

Member states contribute billions of dollars annually to the United 
Nations (UN) system[Footnote 1] for programs that meet emergency 
humanitarian needs, provide development assistance, and support 
economic and social development in over 190 countries. To direct these 
programs, member states have created governing bodies in each UN 
organization to develop governance practices for maintaining the 
strategic direction of the organization, overseeing the effective and 
efficient use of resources, and monitoring the actions of management 
and operations. The UN system generally has both internal and external 
accountability and oversight mechanisms. Internal oversight functions 
include reviewing the effectiveness and efficiency of the 
organizations' operations, evaluating the organizations' compliance 
with UN financial rules and regulations, conducting investigations on 
allegations of misconduct, and reporting to the executive heads of the 
organizations. External oversight functions generally report to the 
organizations' governing bodies on the organizations' finances and also 
may perform nonfinancial reviews of the efficiency and effectiveness of 
the organizations' operations. 

As the largest financial contributor to the United Nations, the United 
States has advocated comprehensive management reform of the UN system, 
including measures to strengthen governance and improve oversight. 
Also, over the past 2 years, member states and independent experts have 
proposed management reforms that call for sustained action to 
strengthen accountability and transparency in the UN system by 
improving UN oversight practices. As such, several management reforms 
and proposals have focused on improving the effectiveness and 
increasing the capacity and independence of the oversight function at 
the United Nations. 

In 2005, representatives of UN member states identified an urgent need 
to improve UN management processes and requested that the UN 
Secretariat's Secretary-General and General Assembly propose and 
approve reforms for strengthening the organization in several areas, 
including accountability and oversight. For example, at the 2005 World 
Summit, the General Assembly requested a comprehensive independent 
review of the Secretariat's Office of Internal Oversight Services 
(OIOS) with a view toward strengthening that office, as well as a 
systemwide review of UN governance and oversight.[Footnote 2] While 
these reforms have focused primarily on the Secretariat, they serve as 
a model for UN systemwide reforms to help ensure that resources are 
used effectively and efficiently. However, in 2006, we reported to 
Congress that progress toward implementation of reforms, including 
those relating to strengthening oversight, has been slow.[Footnote 3] 

In this report, we examine the extent to which (1) internal audit 
offices have implemented professional standards for performing audits 
and investigations, (2) evaluation offices have implemented UN 
evaluation standards, and (3) governing bodies are provided with 
information about the results of UN oversight practices. The scope of 
our work includes the internal audit and evaluation offices at the 
three largest UN funds and programs--the United Nations Development 
Program (UNDP), the United Nations Children's Fund (UNICEF), and the 
World Food Program (WFP);[Footnote 4] and three of the largest UN 
specialized agencies-- the Food and Agriculture Organization (FAO), the 
International Labor Organization (ILO), and the World Health 
Organization (WHO). In most of the organizations that we studied, the 
investigations function was part of the internal audit office. 

To complete this study, we analyzed UN documents and processes and 
practices relating to the audit, investigation, and evaluation 
functions of the six UN organizations we examined. We reviewed 
professional standards, guidelines, and best practices for performing 
audits, investigations, and evaluations, including the Institute of 
Internal Auditors' (IIA) International Standards for the Professional 
Practice of Internal Auditing,[Footnote 5] the UN Uniform Guidelines 
for Investigations, and the UN Evaluation Group (UNEG) standards and 
norms.[Footnote 6] The six UN organizations we examined have adopted 
these standards, norms, and guidelines. For the purposes of our study, 
we selected key audit standards to examine the extent to which these 
organizations have implemented IIA standards. To examine the extent to 
which the organizations have implemented UNEG standards and norms, we 
selected those standards and norms to match the key audit standards to 
the extent possible. We also compared current governance structures at 
the six organizations with IIA guidance on the use of audit committees. 
We interviewed UN officials and staff with governance and oversight 
responsibilities and members of the internal audit committees and the 
external auditors for each organization. Finally, we interviewed 
officials from the U.S. Departments of State (State), Labor, and Health 
and Human Services; the U.S. Agency for International Development; and 
32 UN member state representatives. Appendix I contains more details on 
our scope and methodology. We conducted our work in Washington, D.C; 
New York; Geneva; and Rome. We performed our work between June 2006 and 
March 2007 in accordance with generally accepted government auditing 
standards. 

Results in Brief: 

Although the six UN internal audit offices that we reviewed have made 
progress in implementing international auditing standards, they have 
not fully implemented key components of the standards, such as basing 
annual work plans on organizationwide risk-management frameworks and 
obtaining the necessary resources to conduct their work. All of the 
audit offices are at various stages of developing and implementing 
their own risk-based work plans, but the offices are doing so without 
the benefit of completed organizationwide risk-management frameworks, 
which are essential in identifying the areas with the greatest 
vulnerability to fraud, waste, and abuse. In addition, three of the six 
UN audit offices lack sufficient staff to cover high-risk areas of the 
organizations. Furthermore, three of the audit offices have not fully 
implemented quality assurance processes, which include activities such 
as internal and external peer reviews. For example, ILO has not had an 
external peer review, but it plans to have one this year for the first 
time. All audit offices have a tracking and follow-up system for 
recommendations to ensure that senior management is addressing 
deficiencies identified by internal and external auditors, and some 
offices have undertaken efforts to strengthen their follow-up 
processes. In addition, three of the organizations currently do not 
have professional investigators and rely heavily on auditors to probe 
allegations of wrongdoing, which is a practice that could impact the 
organizations' ability to provide adequate audit coverage and ensure 
that investigations are properly carried out. While most of the 
organizations are in various stages of considering and implementing 
ethics policies, none have adopted financial disclosure requirements 
for their oversight staff to monitor potential conflicts of interest. 

Although the six UN evaluation offices that we reviewed are working 
toward implementation of UN evaluation standards and norms, such as 
resource adequacy and quality assurance processes, they have not fully 
implemented them. Five of the evaluation offices reported that they 
lack sufficient resources and staff with expertise to manage and 
conduct evaluations--conditions that have impacted their ability to 
conduct high-quality and strategically important evaluations. For 
example, UNICEF reported that about two-thirds of its country offices 
do not have sufficient staff with the requisite skills to consistently 
deliver high-quality evaluations. In addition, five of the evaluation 
offices have not fully implemented quality assurance processes relating 
to evaluation staff selection, design, and reporting. Specifically, 
they have identified weaknesses in areas such as evaluation 
methodology, scope, evidence, and findings. Furthermore, all of the 
evaluation offices are working toward fully establishing mechanisms 
that systematically follow up and report on the status of their 
recommendations, to provide assurance to senior management that steps 
are being taken to address identified weaknesses in their programs. 

The governing bodies responsible for oversight and accountability of 
the resources of the six UN organizations that we reviewed lack full 
access to internal audit reports and most lack direct information from 
the internal audit offices about the sufficiency of their resources and 
capacity to conduct their work, which could provide greater insights 
into the organizations' operations and identify critical systemic 
weaknesses. In addition, although most of the organizations have audit 
committees that review internal audit activities and report to the 
heads of the organizations, only WHO has an audit committee that is 
autonomous of senior management and is part of the governing body. To 
carry out some of their oversight responsibilities, UN governing bodies 
are provided with the external auditor's report on the organization's 
financial statements as well as the internal audit office's summary of 
internal audit activities. However, the governing bodies do not have 
full access to internal audit reports--including those that identify 
systemic weaknesses in internal controls and cases of fraud, waste, and 
mismanagement--and the management response letter to audit reports, 
which includes senior management's plans for taking correction action. 
Also, most of the governing bodies lack direct information from the 
internal audit offices on the sufficiency of the audit offices' 
staffing and financial resources as well as the audit offices' capacity 
for conducting effective oversight. International best practices 
suggest that oversight could be strengthened by establishing an 
independent audit committee--composed of members external to the 
management of the organization and reporting to the governing body on 
the effectiveness of the audit office and on the adequacy of its 
resources--as part of the governance structure of each of the United 
Nations' governing bodies. However, the audit committees at four of the 
six UN organizations that we examined are not in line with these 
international best practices, and one entity does not have an audit 
committee. Four of the five audit committees are not accountable to 
their governing bodies, and three of these committees are composed of 
senior management officials. An audit committee that is composed of 
external members and accountable to its governing body also could 
assist it with its responsibility to monitor the organization's 
oversight function. In the absence of such an audit committee, many of 
the member state representatives to the governing bodies told us that 
they find such monitoring difficult because they lack sufficient 
resources and expertise. 

We make recommendations in this report to the Secretary of State to 
direct the U.S. Missions to work with member states to improve 
oversight and accountability in UN organizations by (1) making audit 
reports available to the governing bodies that will provide further 
insight into the operations of the United Nations' organizations and 
identify critical systemic weaknesses and (2) establishing independent 
audit committees that are accountable to their governing bodies, where 
this does not now occur. 

We requested and received comments on a draft of this report from the 
Secretary of State and cognizant officials representing the six UN- 
affiliated agencies that we reviewed--FAO, ILO, UNDP, UNICEF, WFP, and 
WHO. These comments are reprinted in appendixes II through VIII, along 
with our responses to specific points. State endorsed the main findings 
and conclusions of the draft report and stated that the United States 
has established partnerships with several other like-minded member 
states, and will continue to work with them to build a constituency for 
strengthening oversight and accountability in the UN system. FAO stated 
that our report observations are clear, comprehensive, and well- 
reasoned and that its governing body has begun taking steps that align 
with implementing our recommendations. UNDP stated that it is reviewing 
the issues related to the recommendations, and that a number of these 
issues will be part of the interaction with the Executive Board during 
June 2007. WFP noted that the substance of our recommendations is 
currently being debated in many forums throughout the UN system, and 
that its Executive Board and its bureau have been engaged in 
considering issues related to the composition and reporting lines of 
the audit committee. WHO commented that it is engaged with other 
organizations in the UN system in addressing the issue of access to 
internal audit reports and noted that its Program, Budget and 
Administration Committee already fulfills most of the requirements that 
we advocate, such as independence from senior management and 
accountability to the governing body. ILO commented that it has serious 
reservations about implementing our recommendation to make internal 
audit reports available to governing bodies. We maintain that providing 
the governing body access to all internal audit reports will provide 
the governing body greater insight into the organization's operations 
and highlight systemic weaknesses in internal controls. UNICEF noted 
that any proposal to reorder the governance mechanisms so as to align 
them with a particular understanding of the IIA standards would be a 
matter for UNICEF's Executive Board (among other institutions). We 
recognize that decisions regarding changes in UNICEF's lines of 
reporting to allow UNICEF's governing body access to all audit reports, 
as well as the creation of an independent audit committee to be in line 
with international best practices, will require the consideration and 
approval of UNICEF's Executive Board. We also maintain that the United 
States, as a member of UNICEF's governing body, should work with other 
member states to consider implementation of these recommendations. 

Background: 

According to the United Nations, effective oversight services are a 
high priority and a crucial component in the Secretary-General's 
efforts to strengthen the organization in the 21st century. Effective 
oversight practices are integral to establishing good governance and 
help to provide assurance to governing bodies and senior management 
that resources contributed to the organization are not vulnerable to 
waste, fraud, and abuse. 

Generally, governance is the system by which organizations are 
directed, controlled, and held to account to provide reasonable 
assurance that objectives are met and that operations are carried out 
in an ethical and accountable manner. Good governance requires a clear 
division of responsibilities between the governing body and senior 
management. In addition, good governance includes clearly articulated 
ethical values, objectives, and strategies; proper tone at the top; and 
internal controls. An absence of good governance structures and a lack 
of adherence to basic governance principles increases the risk of 
public corruption. The governing bodies in each UN organization are 
responsible for developing governance practices for maintaining the 
strategic direction of the organization, and monitoring the actions of 
management and operations. 

Oversight is a key activity in governance that addresses whether 
organizations are carrying out their responsibilities and serves to 
detect and deter public corruption. Oversight functions include 
monitoring, evaluating, and reporting on the organization's performance 
and holding senior management accountable for results. These functions 
also encompass the auditing, internal and external, of the 
organization's financial results and the effectiveness of its internal 
controls. In addition, oversight also includes investigation of 
allegations of fraud. The UN system, including its affiliated funds and 
programs and specialized agencies, generally has both internal and 
external accountability and oversight mechanisms. 

The principal bodies responsible for conducting oversight in the UN 
funds and programs and specialized agencies in our study include member 
states in their capacity as members of the governing bodies; governing 
body committees; internal auditors; investigators; evaluation offices; 
and external auditors, including the UN Joint Inspection Unit (JIU). 
These bodies are defined in the following text and illustrated in 
figure 1. 

* Member states refers to those countries that are members of each of 
the UN organizations. 

* Governing body is composed of member state representatives who are 
responsible for steering and directing the organization. Its role is to 
set and maintain the organization's strategic direction, effective and 
efficient allocation of resources, and effective monitoring of 
management and operations. The governing body exercises oversight over 
senior management. 

* Governing body committee is composed of member state representatives 
who are responsible for certain governance functions, such as budget 
and finance committees; it makes recommendations to the governing body 
or acts on its behalf in the interests of efficiency and effectiveness. 

* Senior management refers to the chief administrative or executive 
officer of a UN organization and his or her senior management team. 
Senior management is responsible for the organization's day-to-day 
operations and the implementation of the policies, strategies, and 
budgets established by the governing body. It has the duty to assess 
risk and establish effective controls to achieve objectives and avert 
risk. Senior management exercises oversight over the organization's 
operational activities. 

* Internal auditors determine whether there is an adequate and 
effective system of internal controls for providing reasonable 
assurance with respect to the integrity of financial and operational 
information; compliance with regulations, rules, policies, and 
procedures, and safeguarding of assets; economic and efficient use of 
resources, and identifying opportunities for improvement; and 
effectiveness of program management for achieving objectives consistent 
with policies, plans, and budgets. Internal auditors are generally 
accountable to the organization's senior management. 

* The Office of Internal Oversight Services is the internal auditor of 
the UN Secretariat and other UN organizations, including several funds 
and programs, under the authority of the UN Secretary-General. Certain 
funds and programs, such as UNDP and UNICEF, fall within OIOS's 
jurisdiction but do not always use OIOS's services because they have 
their own oversight units. OIOS's authority does not extend to UN 
specialized agencies, such as FAO, ILO, and WHO.[Footnote 7] 

* Investigators examine allegations of wrongdoing, including fraud, 
corruption, misconduct, and other irregular activity, to propose 
corrective management and administrative measures, such as an eventual 
prosecution or disciplinary measures as appropriate. Investigators are 
accountable to the organization's senior management. 

* Evaluators determine the relevance, effectiveness, and impact of an 
ongoing or completed program, project, or policy in light of its 
objectives and accomplishments to incorporate lessons learned into 
decision-making processes. The governance structures of evaluation 
offices vary among organizations; either the governing bodies or the 
heads of the organizations are responsible for the governance of the 
evaluation offices. 

* The external auditor reports on the organization's accounts and may 
make observations on financial procedures, the accounting system, 
internal financial controls, and the administration and management of 
the organization in general. Several bodies within the UN system 
provide external oversight. The Board of Auditors (BOA) serves as the 
external auditor for the UN funds and programs. BOA is mandated to 
express an opinion on the financial statements and, in general, on the 
administration and management of the organization. Each of the 
specialized agencies has its own external auditor, which is generally 
the Auditor-General of a member state's supreme audit 
institution.[Footnote 8] 

* In addition, the Joint Inspection Unit, the only independent 
systemwide external oversight body, has the authority to perform 
inspections, evaluations, and investigations throughout the UN system, 
including the funds and programs and specialized agencies.[Footnote 9] 

Figure 1: Governance Structure of Selected UN Funds and Programs and 
Specialized Agencies: 

[See PDF for image] - graphic text: 

Source: GAO analysis of UN data. 

[A] The Board of Auditors serves as the external auditors for both UNDP 
and UNICEF. Currently, the National Audit Office of the United Kingdom 
serves as the external auditor for WFP. 

[B] Currently, the National Audit Office of the United Kingdom serves 
as the external auditor for ILO, while the Comptroller and Auditor 
General of India serves as the external auditor for WHO and FAO. 

[C] UN funds and programs operate under the authority of the UN 
Secretariat. 

[D] WFP is under the authority of the Director General of FAO and the 
UN Secretary-General. 

[End of figure] - graphic text: 

The UN funds and programs and specialized agencies organize their 
internal oversight functions[Footnote 10] in different ways. For 
example, in most of the UN organizations we examined, the oversight 
functions are separated into two distinct units--one unit for the audit 
and investigation functions, and another unit for the evaluation 
function--while in WHO, these three functions are combined into a 
single unit and operate under one office. Figure 2 provides an overview 
of the organizational structure of the oversight functions at the UN 
organizations we studied, as well as their total budgets for the 
biennium 2006-2007. On the basis of UN member states' assessed rates of 
contribution, the U.S. government provides 22 percent of the budgets of 
FAO, ILO, and WHO. The amounts that the United States provides to UNDP, 
UNICEF, and WFP are on a voluntary basis. On the basis of the United 
States' budget for fiscal years 2006 and 2007, the United States 
provided total amounts of about $209 million to UNDP and $249 million 
to UNICEF. In calendar year 2006, the United States contributed $1.1 
billion to WFP.[Footnote 11] 

Figure 2: Internal and External Oversight Structure of Selected UN 
Funds and Programs and Specialized Agencies: 

[See PDF for image] - graphic text: 

Source: GAO analysis of UN data. 

[A] ILO's 2006-2007 biennium budget figure does not include voluntary 
contributions. 

[B] ILO's governing body is a tripartite structure, which is composed 
of 28 member state representatives, 14 employer members, and 14 worker 
members. 

[C] WHO's OIOS is composed of the audit, investigation, and evaluation 
functions. 

[D] Evaluations can be conducted or managed or both by headquarters, 
regional, and field offices. Some evaluation offices (UNDP, ILO, WHO, 
and FAO) are centrally managed and oversee the activities of the 
regional and field offices. Other evaluation offices (UNICEF and WFP) 
activities are decentrally managed and overseen directly by the 
regional and field offices. 

[End of figure] - graphic text: 

The audit, investigation, and evaluation functions within UN 
organizations were established to advise senior management. The primary 
objective of internal oversight in these organizations is to assist 
senior management in fulfilling its responsibilities by providing 
advice on the adequacy of internal controls and management practices on 
the basis of a systematic and independent review of the organizations' 
operations. For example, the mission of WFP's internal audit office is 
to help the organization accomplish its objectives with a systematic 
approach to assess the organization's risk-management, control, and 
governance processes and suggest improvements to them. At the six 
organizations we studied, the chief audit executives were appointed by 
and accountable to the heads of their respective organizations, and in 
some organizations--such as ILO and WHO--the appointments are made 
following a consultation with its governing body. 

The span of oversight and accountability of the evaluation function 
varies among the six organizations we examined. Also, the types of 
evaluations vary and may include corporate,[Footnote 12] thematic, and 
programmatic evaluations. Generally, at the six organizations that we 
examined, evaluation reports are made publicly available.[Footnote 13] 
UNDP, ILO, WHO, and FAO evaluation functions are centralized, such that 
the headquarters evaluation offices manage the evaluation function of 
the organization. For example, based on the evaluation policy of UNDP, 
the evaluation office at headquarters is the custodian of the 
evaluation function.[Footnote 14] As such, the evaluation office, among 
other things, submits its annual plan to the governing body, reports 
annually to the governing body on the function, findings and 
recommendations of evaluations, assures mandatory decentralized 
evaluations and support quality assurance of evaluations, as well as 
conduct strategic, thematic, program, and other evaluations as 
required.[Footnote 15] In contrast, the management of UNICEF's and 
WFP's evaluation functions is decentralized. For example, WFP's 
evaluation function consists of its central evaluation office, which 
manages evaluations, complemented by evaluations that are managed by 
regional bureaus and country offices. In addition, WFP's evaluation 
office at headquarters provides limited informal support to the bureaus 
and country offices. UNICEF's evaluation office at headquarters 
commissions and conducts evaluations and provides guidance on 
evaluation standards, but it has no responsibility for overseeing the 
quality and independence of evaluations at the regional or country 
level. The regional office conducts evaluations related to regional 
strategies and provides oversight and support for evaluations 
undertaken by country offices, and the country offices are responsible 
for strategically selecting and conducting evaluations at the country 
level. 

UN Internal Audit Offices Have Not Fully Implemented Key Components of 
International Auditing Standards: 

Although the six UN internal audit offices that we examined have made 
progress in implementing key components of international auditing 
standards, they have not fully implemented key components of the 
standards. All of the audit offices are at various stages of developing 
and implementing their own risk-based work plans, but they lack a 
completed organizationwide risk-management framework, which is 
essential in identifying the areas with greatest exposure to fraud, 
waste, and abuse. In addition, three audit officials stated that their 
audit offices lack sufficient staff to cover high-risk areas. Three 
audit offices have not fully implemented quality assurance processes, 
such as internal and external peer reviews. All of the audit offices 
have a recommendations tracking and follow-up system to ensure that 
senior management is addressing deficiencies identified by internal and 
external auditors, and some offices have undertaken efforts to 
strengthen their follow-up process. In addition, some of the 
organizations do not have professional investigators and rely heavily 
on auditors to probe allegations of wrongdoing, a practice that could 
impact the organizations' ability to ensure that investigations are 
properly carried out. In addition, while most of the organizations are 
in various stages of considering and implementing ethics policies, none 
have adopted financial disclosure requirements for their oversight 
staff to monitor potential conflicts of interest. Figure 3 provides 
information on the six UN audit offices' progress toward implementing 
international auditing standards. 

Figure 3: Selected UN Funds' and Programs' and Specialized Agencies' 
Progress toward Implementing International Auditing Standards: 

[See PDF for image] - graphic text: 

Source: GAO analysis of UN data. 

[A] WHO conducted an internal self-assessment that was validated by an 
external party. The scope and findings of this review were not provided 
to GAO. 

[End of figure] - graphic text: 

All Audit Offices Are Developing Risk-Based Work Plans but Lack 
Completed Organizationwide Risk-Management Frameworks to Guide Their 
Work: 

Side bar: IIA Standard: Planning: 

The internal audit activity plan of engagements should be based on a 
risk assessment, undertaken at least annually. The input of senior 
management and the board should be considered in this process. 
(2010.A1) 

[End of side bar] 

All audit offices are developing and implementing risk-based work 
plans, but the organizations' senior management has not completed 
organizationwide risk-management frameworks that would assist in 
guiding the audit offices' work plans, as shown in figure 3. A risk- 
management framework is (1) a systematic approach to identifying, 
assessing, and acting on the probability that an event or action may 
occur that could threaten or adversely affect an organization's 
activities, assets, and reputation and (2) the responsibility of the 
organization's management. Accordingly, the framework should reflect 
senior management's perspective of the organization's risk environment 
and enable the internal audit office to direct audit resources to those 
areas with the greatest exposure to fraud, waste, and mismanagement. 
While risk management is the responsibility of the organization's 
senior management, IIA standards state that the internal audit office 
should assist the organization by identifying and evaluating 
significant exposures to risk and by contributing to the improvement of 
risk management and control systems. 

While the internal audit offices of ILO, UNDP, UNICEF, WFP, and WHO 
have contributed to their respective organizations' development of a 
risk-management framework, none of the organizations have fully 
completed such a framework. For example, IIA reported that WFP's audit 
office played a key role in introducing an organizationwide risk- 
management framework by helping to draft the risk-management proposal 
that the executive board approved in late 2005 and by facilitating a 
series of organizationwide risk-management workshops for headquarters 
and field offices.[Footnote 16] IIA also reported that the 
implementation of this organizationwide risk-management framework would 
take about 2 years to complete, and it recommended that WFP continue to 
implement the framework. In response to IIA, WFP indicated that it was 
in the process of identifying a corporate risk coordinator and a chief 
risk officer to work on the project's implementation. However, these 
are only initial steps to developing an organizationwide risk-
management framework. WFP audit officials stated that until WFP has a 
risk-management model in place, the audit office will have to rely on 
its current process for assessing risks, which includes a range of 
factors, such as questionnaires to managers; consideration of prior 
audit results; emerging risks identified in consultation with 
management; and the results of data collection and analysis. In 
contrast, FAO's audit office has not been involved in assisting senior 
management in developing an organizationwide risk-management framework, 
according to FAO's senior audit officials. 

All audit offices are making progress toward establishing their own 
risk-assessment processes to plan their work. These processes are 
unique to each audit office, and the methodology for conducting the 
risk-assessments ranges from an informal process to a more formal risk- 
assessment model. For example, ILO's audit office developed a risk- 
assessment model and undertook a risk assessment toward the end of 
2006. The model is based on a quantitative approach that defines the 
audit universe, numerically ranks audit risks on the basis of a risk 
index, and uses a formula-based scoring system. Previously, ILO's 
external auditor had recommended that the audit office develop a more 
comprehensive risk-based work plan for each biennium, and that the plan 
be formally accepted or approved by the head of the organization to 
confirm his satisfaction on the level of internal audit assurance being 
delivered. ILO first used this risk model to prioritize its 2007 work 
plan. Another example is WHO's audit office, which uses an informal 
risk-assessment process to plan its audit work. WHO audit officials 
stated that the organization has engaged a consultant to assist in 
developing an organizationwide risk-management framework. Once this 
framework is established, audit officials said that they will be better 
informed and will use the framework to help refine their risk-based 
work plans. 

Finally, all audit offices submit their risk-based work plans for 
review and approval by senior management. However, only WHO submits its 
work plans to the governing body for review as called for by IIA 
standards. IIA standards state that the input of senior management and 
the governing body (board) should be considered in the work plan. Input 
from the governing body is essential to help ensure, among other 
things, that the work plans are consistent with the organizations' 
goals; that management understands its risk environment; and that the 
audit office has sufficient resources (which are determined by the 
management and the governing body) to execute the work plan. In 
addition, most audit offices (FAO, UNDP, UNICEF, WFP, and WHO) create 
annual work plans as called for by IIA standards.[Footnote 17] However, 
according to audit office officials, their work plans would benefit 
from an organizationwide risk assessment that reflects management's 
perspectives of the organizations' risk environment. 

Some Audit Offices Lack Sufficient Staff to Cover High-Risk Areas: 

Side bar: IIA Standard: Resource Management: 

The audit chief should ensure that internal audit resources are 
appropriate, sufficient, and effectively deployed to achieve the 
approved plan. (2030) 

[End of side bar] 

Three of the six senior audit chiefs (FAO, UNICEF, and WFP) reported 
that they do not have sufficient resources to carry out their approved 
work plans, while three (ILO, UNDP, and WHO) reported that they have 
sufficient resources. IIA standards require that audit chiefs have 
resources that are appropriate, sufficient, and effectively deployed to 
achieve the approved work plan. While UN audit chiefs can request 
additional resources from the head of the organization through the 
budgeting process, it is the responsibility of the head of the 
organization to ensure that the audit office receives sufficient 
resources to audit high-risk areas or accept the risks for not taking 
action. Generally, UN governing bodies are unaware of the audit 
offices' budget requests, but governing bodies would be aware of 
external auditors' reports that identify the need for increased audit 
resources. Without sufficient financial resources for audit and 
investigative positions, audit offices would not be able to adequately 
address areas, such as financial management and information technology 
systems that are vulnerable to fraud and abuse. We did not review the 
sufficiency of the reported resources. 

Senior audit officials of FAO, UNICEF, and WFP stated that they do not 
have sufficient resources to execute their audit work plans. UNICEF's 
audit capacity does not provide adequate coverage of high or 
significant audit risk areas in headquarters and the field, according 
to UNICEF senior audit officials and UNICEF's external auditor, BOA. 
BOA reported in June 2006 that the audit office's deployment of most of 
its staff resources to the field has limited its coverage of the 18 
headquarters offices and divisions. Specifically, BOA reported that 
between 1999 and 2005, the audit office conducted between one and four 
headquarters audits per year, and that in a number of cases, the areas 
audited did not pertain to the core activity of the division. BOA also 
reported that except for one review--the financial logistics system 
security and authorization--carried out in 2001, the audit office had 
not audited information technology areas such as data centers, 
applications, networks, security, and data integrity. At the time of 
BOA's audit, the audit office lacked information technology (IT) 
expertise, but it subsequently hired one senior IT specialist in 2006. 
UNICEF audit officials agreed with BOA's findings and informed us that 
additional auditors are still needed to expand the coverage of 
headquarters, systems, and performance audits. According to BOA, a 
possible indicator of understaffing is the relationship between the 
number of audit staff and the growth in UNICEF's budget and country 
offices. For example, between 2000 and 2004, although UNICEF's budget 
increased by about 57 percent and its reserves and fund balances 
doubled, the audit office's staff level decreased by one during that 
period. UNICEF audit officials informed us that on the basis of BOA's 
audit, its executive board requested that the audit office conduct a 
needs assessment of its resource requirements, which it is currently 
performing as part of a UNICEF-wide review. 

FAO's audit chief also informed us that the audit office lacks 
sufficient resources to address high-risk areas. The audit chief said 
that there are many high-risk areas that the audit office cannot cover 
within a 2-year period, and that FAO would like to cover 100 percent of 
its high-risk areas every 2 years. According to the audit chief, FAO's 
audit work plan is driven by the financial resources provided to the 
internal audit unit, and the determination of which high-risk areas to 
cover depends on the amount of available financial resources. 

WFP's audit chief informed us that the audit office does not have 
sufficient resources to conduct its planned work for 2007. The audit 
chief stated that the audit office had experienced a budget shortfall 
based on its work plan for 2007, and that WFP absorbed this shortfall 
by decreasing audit coverage of lower-risk areas. However, WFP senior 
officials stated that further budget revisions and curtailment of 
planned recruitment in 2007 has left WFP's internal audit service short 
of its requirements, and that budget uncertainties continue into 2008. 
Furthermore, according to the audit office, for 2007, resource 
constraints have resulted in deferred audit coverage of a number of 
field offices, and the planned audit of a complex special operation 
also was deferred to a future year. 

ILO's, UNDP's, and WHO's audit chiefs stated that their audit offices 
have sufficient resources to conduct most of their planned audit work, 
especially in high-risk areas. According to ILO's audit chief, the 
audit office has sufficient resources to achieve its 2007 audit work 
plan, and funds are available in the 2007 budget to outsource an IT 
audit.[Footnote 18] ILO's external auditor had recommended in 2006 that 
the office consider increasing its level of IT audit specialists to 
support the audit of internal controls, particularly regarding its 
integrated resource information system. The audit chief also stated 
that the proposed 2008-2009 program budget includes provisions for an 
additional professional staff, a part-time general service staff, as 
well as nonstaff resources, which could be used to provide IT audit 
services. The International Labor Conference will consider the proposed 
2008-2009 budget in June 2007. In addition, WHO's audit chief stated 
that he has obtained the number of positions that his office requires 
to complete its planned work and has not had to postpone work or travel 
due to lack of resources. WHO's audit chief also reported that the 
office successfully hired additional staff in 2006 for the 2007 plan of 
work. 

UNDP's senior audit officials stated that the organization currently 
has sufficient resources to address most of its audit work plan for 
2007. In 2005, the audit office reported to the agency head that the 
cases of fraud uncovered in some country offices and at headquarters 
had occurred over long periods, which indicated that internal controls 
and review processes, including internal audits, had been very weak. In 
2006, the audit office requested a budget of about $13 million on the 
basis of its risk-based work plan.[Footnote 19] However, UNDP's senior 
management initially provided the office with a budget allocation of 
about $7 million, according to UNDP audit officials. The audit office 
did not have enough funds to perform its planned work and requested 
additional resources, which was increased by three subsequent 
allotments totaling $1.4 million. Both the audit chief and UNDP's 
external auditor had emphasized to the head of the organization that 
the audit function needs to be strengthened. Furthermore, BOA reported 
in June 2006 that UNDP's internal audit coverage was insufficient and 
that in the past 4 years, the audit office had performed an average of 
less than four audits per year at headquarters, all of which were of a 
very limited scope. BOA reiterated its recommendations to increase the 
audit capacity to cover key areas, such as financial records, 
procedures, and controls at headquarters. In April 2007, UNDP officials 
informed us that for 2004 to 2006, all very-high-risk-rated countries 
and 72 percent of high-risk-rated countries had been audited. In 
addition, UNDP officials said they performed a risk assessment at the 
end of 2006, and senior management allocated $10 million to carry out 
its audit work plan in 2007. Furthermore, the officials said that 
senior management has committed to allocate additional resources as 
deemed necessary. According to UNDP officials, for the 3-year period of 
2005 to 2007, they plan to audit all very-high-risk areas and 96 
percent of high-risk countries. 

Some Audit Offices Have Not Fully Implemented Quality Assurance 
Processes: 

Side bar: IIA Standards: Quality Assurance and Improvement Program: 

Internal assessments should include ongoing reviews of the performance 
of the internal audit activity. (1311)

External assessments, such as quality assurance reviews, should be 
conducted at least once every 5 years by an independent reviewer or 
review team from outside the organization. (1312) 

[End of side bar] 

Although all six audit offices have a number of quality assurance 
measures in place, FAO, ILO, and UNDP fall short of fully meeting the 
IIA quality assurance auditing standards. Quality assurance mechanisms 
are important tools that can provide a level of assurance to the 
management of the organization on the effectiveness and performance of 
the audit function. Quality assurance and improvement programs include 
continuous reviews that are conducted by internal and external 
reviewers. Internal reviews include supervisory reviews of audit 
documentation and reviews of completed audits by auditors who were not 
involved with the engagement to determine whether they were conducted 
in accordance with the organization's quality control policies and 
procedures. External reviews are generally conducted by independent 
firms that examine the audit function and audit documentation against 
established auditing quality standards, such as IIA standards. 

While all audit offices have some form of internal quality assurance 
processes in place, the processes vary widely across organizations and 
are not always standardized or documented. All audit officials stated 
that their internal quality assurance processes include reviews of 
audit documentation by senior audit officials, audit peers, or team 
coordinators to determine whether there is sufficient evidence to 
support audit findings. For example, WHO audit team coordinators review 
work conducted by auditors from the inception to the end of the audit 
and examine the quality of work and the audit evidence gathered. In 
addition, WHO's internal oversight director stated that he reviews all 
aspects of the auditing work, including planning memorandums, report 
drafts, and comments from the auditee, before a report is issued in its 
final format. While some audit offices, such as ILO, UNICEF, and WFP, 
have documented their internal quality assurance processes or have 
adopted software that documents their quality assurance processes, FAO 
and UNDP have not. UNDP has not documented its quality assurance 
process, and the audit office is currently taking steps to document the 
process to comply with IIA standards. FAO audit officials stated that 
they do not have standardized procedures to review audit documentation 
of field auditors but expect to standardize the process with the 
introduction of electronic work papers that auditors from headquarters 
can review. Standardized procedures, including documentation of the 
internal quality assurance process, would help to provide assurance 
that the internal audit activity is performed in accordance with the 
organization's standards and assist peer reviewers in evaluating the 
organization's compliance with the standards. 

Although periodic external peer reviews required by IIA can provide 
reasonable assurance of the quality of the audit offices' work, we 
found that two of the audit lacked a timely external review. UNDP, 
UNICEF, WFP, and WHO audit offices have met IIA standards by undergoing 
external reviews of their quality assurance processes at least once 
over the past 5 years. On the basis of an external review of UNDP's 
2004-2005 audit activities, in June 2006, UNDP's external auditor made 
several recommendations for improving UNDP's audit activities. For 
example, BOA recommended that UNDP enforce the timely receipt of audit 
reports that are prepared by contractors who audit UNDP program 
activities in the field to facilitate the audit office's review. BOA 
also reviewed UNICEF's audit activities and reported that UNICEF had 
implemented many quality assurance processes required by IIA standards. 
BOA recommended that the audit office institute internal peer file 
review and ensure that there is evidence of supervisory review on all 
audit documentation. UNICEF responded that it had implemented BOA's 
recommendations pertaining to quality assurance. Regarding WFP, IIA 
conducted an external review in March 2006 and found that WFP generally 
conforms to its standards. IIA made a number of recommendations, 
including that WFP expand and formalize its internal quality assessment 
activities, such as supervisory reviews of selected audits, and provide 
training to audit management and staff to ensure consistent application 
of audit documentation standards. WFP reported that it is in the 
process of implementing these recommendations. In August 2006, WHO's 
OIOS performed an internal quality assurance self-assessment, which was 
validated by external reviewers. However, WHO did not provide us with 
information covering the scope and findings of this review. According 
to the director of WHO's OIOS, the quality assurance review included 
the office's three functions of audit, evaluation, and investigation 
and indicated general compliance with IIA standards. 

FAO and ILO have not had external peer reviews in the past 5 years, 
according to audit officials. For example, FAO audit officials stated 
that FAO's audit office was peer reviewed in 2001 against standards 
established by the UN Panel of External Auditors. The office was due to 
be reviewed in 2006, but the review was postponed due to budget 
constraints. However, IIA began a review in February 2007, according to 
FAO audit officials. ILO has not had an external review, but according 
to the acting chief of audit, plans have been placed on hold for such a 
review due to difficulty in having audit staff available to support the 
review. According to ILO's acting chief of audit, funds have been 
included in the 2007 budget for an external review to be performed on 
the basis of IIA's standards beginning in fall 2007. 

All Audit Offices Have Implemented a Recommendations Tracking System 
and Follow-up Process, and Some Have Implemented Mechanisms to 
Strengthen Their Process: 

Side bar: IIA Standards: Monitoring Progress: 

The chief audit executive should establish and maintain a system to 
monitor the disposition of results communicated to management. (2500) 

The chief audit executive should establish a follow-up process to 
monitor and ensure that management actions have been effectively 
implemented or that senior management has accepted the risk of not 
taking action. (2500.A1) 

[End of side bar] 

All six audit offices we examined have a system in place to monitor and 
follow up on the recommendations that are made to agency management to 
help ensure that proper attention is being paid to any deficiencies 
that are identified by the internal audit office. Some audit offices 
have also undertaken efforts to strengthen their follow-up process to 
ensure that recommendations are acknowledged and addressed by their 
organizations' management. UNDP, UNICEF, and WFP track the status of 
their recommendations in electronic work paper software, such as CARDS, 
Team Mate, and AutoAudit.[Footnote 20] UNICEF reports that establishing 
the database in AutoAudit has significantly improved tracking and 
reporting on the status of its recommendations. In contrast, FAO, ILO, 
and WHO track their recommendations in software such as Excel or 
Access. FAO audit officials said that they plan to use Team Mate in the 
future because Excel is not as flexible, and that Team Mate will allow 
for input from the departments they have audited. 

All audit offices have a process in place to follow up on the status of 
their recommendations and to determine whether any action has been 
taken to address them. However, the frequency of follow-up and the way 
in which it is conducted varies from agency to agency. For example, 
three of the audit offices follow up with auditees every 6 months (FAO, 
ILO, and UNDP); UNICEF follows up quarterly; WFP follows up monthly on 
the basis of the recommendation implementation due date; and WHO has no 
set time frame for follow up, which instead is determined by the types 
of outstanding recommendations. The audit offices rely on 
implementation reports from the offices that were audited to determine 
whether adequate actions have been taken to close the audit 
recommendations. However, all senior audit officials we interviewed 
stated that these written reports from the auditees are supplemented by 
subsequent reviews of the status of recommendations during the audit 
office's next field visit to verify whether the appropriate actions 
were taken to implement the recommendations. 

Three of the audit offices (FAO, ILO, and WFP) have established 
mechanisms to ensure that recommendations are acknowledged and 
addressed by organization management. For example, according to an FAO 
official, the audit committee has been playing an active role in 
monitoring the status of recommendations, and, as a result, there is 
more commitment from management to follow up on recommendations. At 
every audit committee meeting, the committee members review each 
recommendation to determine which ones have not been addressed. As a 
result of the audit committee's regular monitoring, FAO has cleared the 
backlog of recommendations and improved the timeliness of their 
implementation. According to FAO, of the 2,790 recommendations issued 
during 2000 to 2005, 88.9 percent are closed, 4.9 percent are open, and 
6.2 percent are ongoing. ILO's Accountability Committee is charged with 
examining cases of persistent failure on the part of officials to 
implement the recommendations of the internal and external auditors. 
Furthermore, according to WFP audit officials, WFP's audit committee is 
very active in consulting with management in instances of 
nonresponsiveness by management and where internal audit has concluded 
that management's implementation plans are not satisfactory. 

Some Internal Oversight Units Lack Sufficient Investigative Staff and 
Rely on Other Parties to Investigate Wrongdoing: 

Investigation, which is an integral element of oversight, is a legally 
based and analytical process designed to gather information to 
determine whether wrongdoing has occurred. At the six organizations we 
examined, investigations are guided by the UN Uniform Guidelines for 
Investigations. Three internal oversight units lack a sufficient number 
of professional investigators and rely on other parties who may not be 
qualified to conduct investigations, such as auditors, to determine 
whether wrongdoing has occurred. In addition, some of the oversight 
units that do have professional investigators reported that they are 
limited in their capacity to conduct investigations with their existing 
staff. Limited investigative capacity impacts their ability to conduct 
planned audits and close cases, which may cause backlogs. According to 
the UN Uniform Guidelines for Investigations, organizations should 
reasonably ensure that resources available for investigations are 
proportionate to the number and magnitude of allegations and the 
potential benefits to the outcome of the case. Figure 4 provides 
information on selected UN funds' and programs' and specialized 
agencies' progress toward ensuring sufficient resources to perform 
investigations. 

Figure 4: Selected UN Funds' and Programs' and Specialized Agencies' 
Progress toward Ensuring Sufficient Resources to Perform 
Investigations: 

[See PDF for image] - graphic text: 

Source: GAO analysis of UN data. 

[End of figure] - graphic text: 

Currently, ILO, UNICEF, and WHO do not have professional investigators. 
UNICEF and WHO each have one full-time position allocated for a 
professional investigator. UNICEF's position is currently vacant, while 
WHO's position is in the process of being filled. ILO does not have any 
investigator positions, although its internal oversight officials have 
made several requests to management for additional investigative 
resources. In March 2007, ILO's governing body approved ILO's 2008-2009 
budget, which requested an increase for oversight resources. According 
to ILO's chief internal auditor, the additional resources will be 
allocated to employ a qualified and experienced investigator. In 
addition, while UNDP has professional investigators, in late 2006, UNDP 
senior officials reported they needed additional investigative staff 
because of increases in the number of cases due to the adoption of a 
whistleblower protection policy and the establishment of a fraud 
hotline in 2005. Accordingly, UNDP's internal oversight unit stated in 
its annual report to its governing body that additional investigative 
resources are needed to address the increased caseload. Subsequently, 
in 2007, UNDP's investigative unit received a 43 percent increase in 
resources, for a total of $2 million, and UNDP officials told us that 
they are sufficiently staffed to meet their needs. Moreover, FAO's 
investigative capacity is limited because the head of investigations is 
the only staff member with a background in investigations. The rest of 
the staff consists of auditors who have some investigative training but 
lack investigative experience, according to FAO officials. Currently, 
WFP's investigative function is staffed with seven positions, including 
five professional staff. However, there are new organizationwide 
initiatives that may increase WFP's caseload, and WFP's senior 
officials told us they will monitor the impact of these initiatives to 
ensure that investigative resources continue to be sufficient. 

Because the UN internal oversight units we examined lack professional 
investigators, these units rely on auditors or consultants to conduct 
investigations. As a result of their limited capacity, many internal 
oversight units have backlogs of investigative cases and are unable to 
complete planned audits. The internal oversight units of ILO and WHO, 
which do not have professional investigators, rely on auditors to 
conduct investigations on an as-needed basis. Currently, all of ILO's 
auditors are engaged in conducting investigative work, according to ILO 
senior officials. Also, in a 2006 report of the internal oversight 
activities, WHO noted that it makes resources available for 
investigations as situations develop, and that regularly scheduled 
audit work is interrupted or deferred to provide resources for 
investigative purposes. FAO and ILO internal oversight officials 
reported that they have been unable to conduct their planned audits 
because auditor resources were diverted at times to conduct 
investigations that occurred throughout the year. In addition, some 
organizations hire consultants to conduct investigations as an interim 
measure. FAO, UNDP, WFP, and WHO officials reported hiring consultants 
to conduct investigative work. These shortfalls, in part, have led to a 
backlog of cases that have not been resolved at four of the six 
organizations we studied (FAO, UNDP, UNICEF, and WFP). For example, in 
2006, UNDP reported a backlog of 57 outstanding cases--55 unresolved 
cases were carried forward from 2005, and 2 unresolved cases were from 
2004. With the additional resources for two investigator positions UNDP 
received in 2007, UNDP officials told us that their capacity to handle 
cases should improve. 

UN Agencies Are in Various Stages of Adopting Ethics Policies: 

Most organizations are in various stages of adopting ethics policies, 
such as requiring conflict-of-interest and financial disclosure 
statements and adopting whistleblower policies to protect those who 
reveal wrongdoing. Ethics policies could strengthen oversight by 
helping to ensure more accountability and transparency within the 
organizations. All UN employees are subject to standards for ethical 
conduct that have been established by the International Civil Service 
Advisory Board.[Footnote 21] Ethical standards developed by IIA and the 
UN Uniform Guidelines for Investigations apply specifically to auditors 
and investigators, respectively. UNEG is currently drafting its own set 
of ethical guidelines for UN evaluation staff.[Footnote 22] 

UN organizations have created various ethics policies across the six 
organizations to help to ensure that all staff, including internal 
oversight staff, are free from conflicts of interest. Some internal 
oversight units rely on their staff to comply with a general 
declaration that all UN employees sign when they are employed by the 
organization. For example, all FAO employees, including oversight 
staff, are required to sign a Declaration for Code of Conduct, which 
states that one must exercise loyalty and discretion as an 
international civil servant and maintain independence from any 
government or other external party. Similarly, in 2006, ILO began 
requiring all of its employees, including oversight staff, to complete 
a disclosure of interest statement on a periodic basis. WHO employees 
also complete a Declaration of Interest statement; however, the 
requirement applies to its senior managers and staff members who 
perform selected functions, such as procurement, and does not apply to 
its entire oversight staff. Other organizations, such as UNDP and WFP, 
rely on their oversight staff to self-report any conflict of interests, 
although WFP's investigative unit was developing a conflict-of-interest 
policy to cover investigations staff in fall 2006. 

None of the six organizations we examined require their internal 
oversight staff to disclose their financial interests, which could help 
to ensure that employees are free from conflicts of interest. In late 
2006, UNICEF established a financial disclosure policy for senior 
management and officials who are responsible for selected functions, 
such as procurement, but did not apply the policy to auditors, 
investigators, and evaluators below the senior management level. 
Although FAO does not currently require its oversight staff to disclose 
their financial interests, it is currently seeking governing body 
approval to amend its staff regulations to require financial disclosure 
statements. Once FAO has amended its staff regulations, WFP will also 
be able to require its staff to disclose their financial interests. 
However, FAO and WFP have not determined whether this policy will apply 
to all of their internal oversight staff. Furthermore, all six of the 
organizations we studied have made efforts to increase accountability 
by implementing whistleblower protection policies in line with UN 
Uniform Guidelines for Investigations to protect those who reveal 
wrongdoing within their respective organizations. FAO, ILO, UNICEF, 
WFP, and WHO have established whistleblower protection policies, and 
UNDP is developing such a policy. Figure 5 provides information on 
selected UN funds' and programs' and specialized agencies' progress 
toward implementing financial disclosure and whistleblower protection 
policies. 

Figure 5: Selected UN Funds' and Programs' and Specialized Agencies' 
Progress toward Implementing Financial Disclosure and Whistleblower 
Protection Policies: 

[See PDF for image] - graphic text: 

Source: GAO analysis of UN data. 

[End of figure] - graphic text: 

UN Evaluation Offices Have Not Fully Implemented UN Evaluation 
Standards: 

Although the six UN evaluation offices that we examined are working 
toward implementing components of UN evaluation standards and norms, 
they have not fully implemented them.[Footnote 23] These components 
include ensuring that adequate resources are allocated to enable the 
evaluation function to operate effectively, implementing quality 
assurance processes, and following up systematically on recommendations 
that were made to management. Most of the evaluation offices reported 
that they lack sufficient resources and staff with expertise to manage 
and conduct evaluations--conditions that have impacted their ability to 
conduct high-quality and strategically important evaluations.[Footnote 
24] Most of the evaluation offices have not fully implemented quality 
assurance processes; as a result, there are reported weaknesses in 
areas such as evaluation staff selection, design, and reporting 
processes. In addition, all of the evaluation offices are working 
toward fully establishing mechanisms that systematically follow up and 
report on the status of their recommendations to provide assurance to 
senior management that steps are being taken to address identified 
weaknesses in their programs. Figure 6 provides information on the six 
UN evaluation offices' progress toward implementing UNEG's standards 
and norms. 

Figure 6: Selected UN Funds' and Programs' and Specialized Agencies' 
Progress toward Implementing UNEG Standards and Norms: 

[See PDF for image] - graphic text: 

Source: GAO analysis of UN data. 

[End of figure] - graphic text: 

Most Evaluation Offices Lack Sufficient Resources and Expertise: 

Side bar: UNEG Standard/Norm: 

Ensure adequate financial and human resources for evaluation in order 
to allow efficient and effective delivery of services by a competent 
evaluation function and enable evaluation capacity strengthening. 
(standard 1.1:2) 

Evaluators must have the basic skill set for conducting evaluation 
studies and managing externally hired evaluators. (norm 9.3 and 
standards 2.1:2 and 2.1:3) 

[End of side bar] 

The evaluation offices of FAO, ILO, UNICEF, UNDP, and WFP reported that 
they do not have enough staff or staff with the appropriate expertise, 
especially in the field, to manage or conduct high-quality and 
strategically important evaluations as required by UNEG. WHO's 
officials stated that their evaluation office has sufficient staff and 
staff with appropriate expertise to conduct and manage evaluations. Due 
to the lack of evaluations staff and expertise at most organizations, 
member states may not be provided with accurate and comprehensive 
information regarding whether the program or project is achieving its 
intended objectives, to make informed decisions as to whether the 
program or project should be modified or eliminated. Specifically, UNEG 
standards call for governing bodies or heads of the organizations, or 
both, to ensure adequate financial and human resources to allow the 
efficient and effective delivery of evaluation services by competent 
staff. In addition, although all evaluation offices engage consultants 
to supplement the work conducted by their evaluators, according to a 
panel of evaluation experts, the availability of qualified evaluation 
consultants in many countries is limited. Some regional officers have 
developed rosters of prescreened consultants to support country offices 
in managing the evaluation process. However, UN officials reported that 
budget constraints and limited supply of well-qualified people hamper 
regional directors' and monitoring and evaluation officers' efforts to 
hire local consultants. We did not review the sufficiency of the 
reported evaluation staff. 

Officials in UNICEF's evaluation office and its peer review panel 
reported that they do not have sufficient numbers of staff or staff 
with appropriate expertise to conduct evaluations and to strengthen 
evaluation capacity.[Footnote 25] Although the number of professional 
monitoring and evaluation staff has increased by 42 percent since 2002, 
UNICEF's evaluation officials reported that their staffing needs are 
still unmet at headquarters and in the field.[Footnote 26] UNICEF also 
reported that funding for evaluations at the country level is not 
allocated separately from other functions so that the 156 professional 
staff in the field perform other duties as well as devote a portion of 
their time to conducting evaluations. In addition, the evaluation 
office reported that about two-thirds of UNICEF's offices do not have a 
monitoring and evaluation officer at the appropriate level of expertise 
and therefore are less able to consistently deliver high-quality 
evaluations.[Footnote 27] In May 2006, an external peer review panel 
recommended that the resources for the evaluation office be increased 
to sufficiently cover strategic evaluations based on the organization's 
priorities. The review panel also stated that critical gaps in quality 
and resources at the regional and country levels weaken the usefulness 
of the evaluation function as a management tool. According to 
evaluation officials, UNICEF's executive board requested that they 
assess the adequacy of the evaluation budget, which they are currently 
performing as part of a UNICEF-wide review. 

UNDP officials reported that they do not have sufficient staff or staff 
with the right skills to manage the evaluations that are performed by 
consultants at the country and regional levels.[Footnote 28] According 
to UNDP officials, existing budget practices for evaluation vary among 
country offices. Evaluation resource requirements are often determined 
on an informal basis for field offices, and the amounts allocated are 
generally insufficient for quality evaluations. In addition, most of 
the country and regional offices are not staffed with evaluation 
specialists, but rather with focal points. With few exceptions, focal 
points are not evaluation specialists but managers with multiple 
responsibilities who may perform some evaluation-related work. 
Specifically, only 20 of the 142 country offices have full-time 
monitoring and evaluation professionals, specialists or advisors, while 
22 country offices have only focal points. In addition, all 5 regional 
bureaus have focal points that support evaluation planning and liaise 
with country offices and with the evaluation office at headquarters. 
Only 1 regional center has a monitoring and evaluation specialist 
position.[Footnote 29] A senior evaluation official informed us in 
April 2007 that a number of country offices are in the process of 
recruiting monitoring and evaluation professionals. In contrast, 
according to UNDP officials, the centrally managed evaluation function, 
which resides in the evaluation office at headquarters, independently 
produces evaluations of a strategic and policy nature and presents them 
directly to the Executive Board. These evaluations are funded 
adequately, and the expertise of the evaluation staff at headquarters 
and the consultants it recruits are considered highly professional. 

FAO's evaluation officials informed us that FAO does not have 
sufficient resources to manage and conduct evaluations to address a 
reasonable level of senior management's concerns. The evaluation office 
relies heavily on the use of outside consultants for its expertise; 
however, it is difficult to maintain quality evaluations while only 
using consultants, according to the officials. Resources are needed to 
hire staff to manage the consultants' work.[Footnote 30] In addition, 
ILO officials said that all four of its evaluation professionals at 
headquarters are experienced, and that they provide guidance to their 
regional and technical offices.[Footnote 31] However, all major 
evaluations are conducted by consultants in the field, and there is not 
enough staff at the field level with the expertise to manage the 
evaluation process and to ensure that the evaluations produced by the 
consultants are of good quality. ILO officials informed us in April 
2007 that the 2008-2009 budget will include funding for two additional 
staff. Furthermore, according to WFP officials, their current plan of 
work for evaluations has been designed to fit resources allocated for 
evaluations rather than to ensure adequate resources for the evaluation 
function. WFP officials said that they lack resources to conduct 
evaluations especially in the regional and country offices. According 
to the officials, only 50 percent of WFP's planned decentralized 
evaluations managed by regional bureaus and country offices were 
actually conducted in 2006. Similar to other UN evaluation offices, 
such as UNDP and UNICEF, WFP officials said that there are few 
dedicated monitoring and evaluation staff in regional offices, and that 
most of them handle a large number of other duties with only limited 
experience in evaluation. According to the officials, this situation 
hampers the quality of decentralized evaluations. 

Most Evaluation Offices Have Not Fully Implemented Quality Assurance 
Processes: 

Side bar: UNEG Norm: 

Each evaluation should employ design, planning, and implementation 
processes that are inherently quality oriented, covering appropriate 
methodologies for data collection, analysis, and interpretation. (norm 
8.1) 

Evaluation reports must present in a complete and balanced way the 
evidence, findings, conclusions, and recommendations, etc. (norm 8.2) 

[End of side bar] 

The evaluation offices of FAO, ILO, UNDP, UNICEF, and WFP have not 
fully implemented quality assurance processes to help ensure that 
evaluation reports adequately address criteria such as evaluation 
methodology, scope, evidence, and findings.[Footnote 32] WHO's director 
of OIOS states that the office has in place a stringent internal and 
external quality assurance review system for the evaluation function 
and that an internal quality assurance self-assessment, which was 
validated by external reviewers, indicates that the evaluation office 
was in general compliance with IIA standards.[Footnote 33] A number of 
the reported deficiencies point to weaknesses in the design process 
(purpose and objectives, scope, and methodology); in the reporting 
process (evidence-based findings, conclusions, and limitations); and 
the staff selection process (the quality of the evaluators and 
management of the process). However, while not required by UNEG's 
standards and norms, some of the entities have taken steps to implement 
quality-review mechanisms, such as external peer reviews of draft 
reports, external review of their quality assurance processes, and 
evaluation committees, to provide an added level of quality assurance. 
UNDP and UNICEF have had external peer reviews of their evaluation 
offices at headquarters, and FAO, ILO, and WFP have performed quality 
appraisal exercises or self-assessments that have identified several 
areas where their quality assurance processes could be improved. 

ILO's evaluation office reported in November 2006 that while it has 
addressed shortcomings in its evaluation practices, it needs to fully 
implement quality assurance processes to improve the quality of its 
evaluations. The evaluation office reported that some areas of the 
evaluations show strength, but the office does not consistently have 
well-developed monitoring and review plans, as well as indicators and 
targets, for which evaluators can conduct evaluations. To improve the 
quality of its evaluation reports, ILO performed a quality appraisal 
exercise and reviewed 16 of the 65 independent project evaluations that 
were finalized in 2005. In November 2006, ILO reported, among other 
things, the following results on the basis of its review: 

* About one-half of the evaluation reports did not state the purpose, 
scope, or objectives of the evaluation. 

* Many reports did not include a methodology section or did not explain 
the methodology in a satisfactory manner. 

* Only 1 of 6 evaluation reports that used sampling or case studies 
explained the selection method. 

* All but 1 of the reports included recommendations and identified 
lessons learned, but it was difficult to extract the lessons learned 
from the evaluations. 

* The findings and conclusions were generally of adequate to good 
quality, but the quality of the analysis varied. 

On the basis of this appraisal, ILO officials stated that the two key 
factors for improving the quality of evaluations are the quality of 
evaluators and the effective management of the evaluation process. As a 
result, (1) the evaluation office has designed 1-day training courses 
on managing independent evaluations, guidelines to provide to all 
external evaluators on expected content and quality of their evaluation 
reports, and (2) steps are being taken to include oversight and control 
of the selection of evaluators, among other things. 

A UNDP senior official reported in May 2006 that the quality and 
utility of the evaluations commissioned by country offices are uneven. 
Some evaluations present rigorous and credible assessments of UNDP 
performance, while others are lacking in their assessment of the 
program's performance and evaluative evidence, according to the UNDP 
senior official.[Footnote 34] The UNDP senior official also said that 
part of the problem comes from a lack of clarity in program objectives 
and poorly defined performance indicators. In contrast, UNDP officials 
said that the evaluation office at headquarters follows a strict regime 
of quality assurance, including quality validation by external advisory 
panels. In December 2005, an external advisory panel completed a peer 
assessment of UNDP's evaluation office at headquarters and reported 
that it produces evaluations that are credible, valid, and useful for 
learning and strategy formation in the organization.[Footnote 35] UNDP 
reports that it is taking a number of actions to help ensure the 
quality of centrally managed and decentralized evaluations. In June 
2006, the Executive Board approved an evaluation policy for UNDP, which 
is based on the requirements of UNEG standards and norms. Quality 
standards are being developed for each stage of the evaluation process, 
including the planning, conduct, and use of evaluations. UNDP officials 
said that these standards will provide objective, transparent 
benchmarks against which quality can be checked, scored, and ensured at 
each stage of the process.[Footnote 36] According to UNDP officials, 
the implementation of the evaluation policy for field evaluations has 
just begun, and the evaluation office at headquarters intends to carry 
out an assessment of the policy's implementation in 2008-2009. 
Furthermore, the evaluation office hopes to update its handbook on 
evaluation and monitoring in 2007. 

While UNICEF's evaluation office at headquarters reports that it has 
provided guidance and quality standards for conducting evaluations and 
reporting on them, it states that while there has been progress over 
the past 2 years, considerable improvement is required, particularly at 
its country offices, to ensure the quality of its evaluations.[Footnote 
37] In addition, UNICEF's peer review panel reported in May 2006 that 
at the country level, in particular, there were inconsistencies in 
applying guidance provided by the evaluation office at headquarters to 
ensure that all evaluations and evaluation reports meet the required 
quality standards. The panel reported that consideration should be 
given to strengthening guidance through training on evaluation 
reporting standards, such as evidence, conclusion, and recommendations, 
and that the accountability for quality assurance across UNICEF's 
evaluation function should be more clearly defined, particularly at the 
country and regional levels. 

FAO evaluation officials said that they have a quality assurance 
process in place that differs on the basis of the types of evaluation 
reports it produces. According to the evaluation officials, internal 
quality assurance was strengthened with a set of quality standards 
introduced in the last 3 months and the addition of review conducted by 
external evaluation specialists to the reviews carried out by 
independent peer review panels and staff. FAO officials informed us 
that there was further room for improvement regarding whether the 
evaluation office was meeting UNEG's quality standards, including for 
corporate evaluations. WFP performed a self-assessment of its 
evaluation function in August 2005 as part of the UNEG checklist on 
evaluation quality and identified areas for improvement, such as 
ensuring that the quality of evaluation reports is systematically 
controlled by quality rules, which it is currently addressing. 

While not required to do so by UNEG's standards and norms, some of the 
organizations have taken steps to implement quality review mechanisms, 
such as external peer reviews of draft reports, peer reviews of the 
evaluation function, and evaluation committees, to provide an added 
level of quality assurance. For example, WFP's evaluation office said 
that it uses the Active Learning Network for Accountability and 
Performance in Humanitarian Action (ALNAP) for the review of its 
humanitarian evaluations.[Footnote 38] In addition, three of the 
evaluation offices (UNDP, UNICEF, and WHO) have had external peer 
reviews that cover their quality assurance processes within the past 
year or 2, while two are currently undergoing reviews (FAO and WFP). 
Furthermore, four of the evaluation offices (FAO, ILO, UNICEF, and WFP) 
have established evaluation committees. 

All Evaluation Offices Are Working toward Fully Establishing Mechanisms 
to Systematically Follow Up and Report on the Status of Their 
Recommendations: 

Side bar: UNEG Standard: 

There should be a systematic follow-up on the implementation of the 
evaluation recommendations that have been accepted by management and/or 
the governing bodies. (norm 12.2 and standard 3.17:41) 

There should be a periodic report on the status of the implementation 
of the evaluation recommendations. This report should be presented to 
the governing bodies and/or the head of the organization. (norm 12.3 
and standard 3.17:42) 

[End of side bar] 

All evaluation offices are working toward fully establishing mechanisms 
to systematically follow up and report on the implementation status of 
their recommendations. UNEG requires its evaluation offices to perform 
a systematic follow-up and prepare a periodic report on the status of 
the implementation of the evaluation recommendations that have been 
accepted by the head of the organization or the governing body, or 
both. 

FAO's, ILO's, UNDP's, and WHO's evaluation offices have systems in 
place to follow up on management's response to their evaluation 
recommendations. Officials of ILO's evaluation office said that its 
monitoring of management's implementation of recommendations is 
overseen by ILO's Evaluation Advisory Committee, which requires ILO 
management to formally respond every 6 months to the evaluation 
office's findings and recommendations. UNDP's evaluation office 
developed its recommendation monitoring system in 2006 and has a 
systematic follow-up process in place. FAO's program committee[Footnote 
39] requires that management respond to the evaluation office's 
recommendations by indicating which recommendations it will accept or 
reject, or both, and report on the progress made in implementing the 
recommendations. The program committee requires FAO's evaluation office 
to determine whether the report is produced and complies with the 
standards, according to the chief evaluation officer. WHO has a follow- 
up process in place, and the frequency of recommendation follow-up 
depends on the type of the evaluation. 

UNICEF's and WFP's evaluation offices have begun to develop evaluation 
recommendation tracking systems to allow better follow-up on the status 
of their recommendations. UNICEF's evaluation officials stated that 
they are in the process of developing such a system because the prior 
recommendation monitoring processes did not use a consistent structure 
or guidance. Specifically, the evaluation office had been addressing 
the status of recommendations through memorandums that are exchanged 
among divisions or offices involved in action plans.[Footnote 40] Like 
UNICEF, WFP is in the process of developing a follow-up system, which 
will take into account international good practice, as discussed during 
UNEG's meetings, to further improve its system. 

All of the evaluation offices provide periodic reporting on the status 
of their recommendations to agency heads or their governing bodies, or 
both. The reporting of the status of recommendations would indicate to 
management and the governing bodies the extent to which actions are 
being taken to address identified weaknesses in the evaluation programs 
or projects. ILO's and WFP's evaluation offices report to their 
governing bodies annually on the implementation status of their 
recommendations, and WHO reports twice a year to its senior management 
and governing body. FAO's evaluation office is required to provide a 
status report on its recommendations to its governing body after 1 to 2 
years, depending on the type of evaluation performed. Every 4 months, 
the head of UNDP's evaluation office provides a report to senior 
management on the status of the implementation of its recommendations, 
which includes highlighting recommendations and systemic issues that 
are not being addressed. UNDP's evaluation office plans to provide a 
periodic report on the status of its recommendations to its governing 
body as part of its annual reporting, beginning in 2007. In addition, 
UNICEF's evaluation office provides a report on the status of its 
evaluation recommendations to its evaluation committee, which is 
chaired by its executive director. While UNICEF officials said that 
UNICEF does not provide periodic reporting covering the specific status 
of each recommendation to its governing body, it provides information 
to give the governing body a general understanding of whether the 
systemic issues the evaluation office raised are being addressed. 

Governing Bodies Lack Full Access to Information That Could Provide 
Greater Insights into UN Organizations' Operations and Identify 
Critical Systemic Weaknesses: 

The governing bodies responsible for oversight and accountability of 
the resources of the six UN organizations that we reviewed lack full 
access to internal audit reports and most lack direct information from 
the internal audit offices about the sufficiency of their resources and 
capacity to conduct their work, which could provide greater insights 
into the organizations' operations and identify critical systemic 
weaknesses. In addition, although most of the organizations have audit 
committees that review internal audit activities and report to the 
heads of the organizations, only WHO has a committee that is autonomous 
of senior management and is part of its governing body. To carry out 
some of their oversight responsibilities, UN governing bodies are 
provided with the external auditor's report on the organization's 
financial statements as well as the internal audit office's summary of 
internal audit activities. However, where the governing bodies do not 
have full access to internal audit reports, they may lack full 
information on systemic weaknesses in internal controls; cases of 
fraud, waste, and mismanagement; senior management's response to audit 
recommendations; and senior management's plans for taking correction 
action. Also, most of the governing bodies lack direct information from 
the internal audit offices on the sufficiency of the audit offices' 
staffing and financial resources as well as the audit offices' capacity 
for conducting effective oversight. In addition, international best 
practices suggest that oversight could be strengthened by establishing 
an independent audit committee--composed of members external to the 
management of the organization and reporting to the governing body on 
the effectiveness of the audit office and on the adequacy of its 
resources--as part of the governance structure of each of the United 
Nations' governing bodies. However, the audit committees at four of the 
six UN organizations we examined are not in line with these 
international best practices, and one of the entities does not have an 
audit committee. Four of the five audit committees are not accountable 
to their governing bodies, and three of these committees are composed 
of senior management officials. An audit committee that is composed of 
external members and accountable to the governing body could also 
assist it with its responsibility to monitor the organization's 
oversight function. In the absence of such an audit committee, many of 
the member state representatives to the governing bodies told us they 
find such monitoring difficult because they lack sufficient resources 
and expertise. 

Governing Bodies Lack Full Access to Internal Audit Reports: 

While the governing bodies of the six organizations we examined receive 
information from various sources about the effectiveness of the 
organizations' financial and programmatic operations, they do not have 
full access to internal audit reports, which could increase 
transparency and provide further insight into the organizations' 
operations. Currently, the governing bodies receive information on the 
organizations' operations from various sources, including the external 
auditor's report on the organization's financial statements, the 
internal audit office's report summarizing its main findings and 
activities, and the audit committee's report on the internal audit 
office's activities. For example, UNICEF's audit office provides an 
independent annual report to the governing body covering its summary of 
audit activities, findings, analysis of systemic weaknesses, and issues 
of internal controls. In September 2006, UNICEF's Executive Board 
requested that UNICEF's audit office further enhance the level of 
analysis in its annual report to include management responses to key 
and recurring issues identified by the audit office, as well as assess 
and report on the adequacy of resources for the internal audit 
function, which the audit office will provide in future reporting. 

While these existing information sources help the governing body 
exercise its oversight responsibilities, some member states want access 
to internal audit reports, which would increase transparency and their 
awareness of the adequacy and effectiveness of the organization's 
system of internal controls. For example, a representative stated on 
behalf of the European Community that the international organizations 
should work in the spirit of transparency regarding member states' 
access to internal audit reports. Similarly, in a governing body 
committee meeting to discuss member states' access to internal audit 
reports, a U.S. representative stated that although the internal audit 
office's annual report to the governing body contains useful 
information, it does not provide enough information to determine 
whether implemented recommendations significantly improve FAO's 
operations. Over the past year, another U.S. representative requested 
specific internal audit reports that would provide more information on 
the oversight of UNDP's operations in a specific country. The U.S. 
representatives stated that full access to UNDP audit reports would 
help them to exercise their oversight responsibilities as members of 
the governing body. 

The UN Secretariat's internal audit office provides member states with 
access to internal audit reports upon request, and some of the UN 
organizations we studied are considering making these reports available 
to member states. In December 2004, the UN General Assembly granted 
member states access to internal audit reports of the UN Secretariat's 
internal audit office to increase transparency and accountability at 
the Secretariat.[Footnote 41] Previously, the internal audit offices' 
reports were issued only to the Secretary-General and the heads of the 
UN organizations under examination. According to a U.S. representative, 
the practice of providing member states with access to audit reports at 
the UN Secretariat has helped to provide insight into the operations of 
the United Nations and identify critical systemic weaknesses. 
Currently, although WHO's internal audit office does not provide member 
states with copies of its internal audit reports, the office's policy 
is to provide a detailed briefing, which may include reading the 
internal audit report, to member states upon request. Under ILO's 
financial regulations, the chief internal auditor has the authority to 
submit any internal audit report to the governing body, if the chief 
internal auditor deems it necessary to do so. In addition, some of the 
organizations we studied are considering making internal audit reports 
available to member states. For example, since May 2006, FAO's 
governing body has been discussing the criteria by which member states 
may access FAO's internal audit reports. Although WFP's governing body 
has not formally considered requesting access to audit reports, WFP's 
chief internal auditor said he would not oppose such a measure if the 
governing body makes such a decision after considering all of the 
advantages and disadvantages, including issues of confidentiality and 
due process, because he believes that member states' access would 
enhance the organization's transparency. However, some internal audit 
officials indicated that it may be difficult and time-consuming to 
modify the current structure of audit reports to delete sensitive 
material, and that making the reports available to member states would 
raise issues concerning confidentiality, administrative workloads, and 
the potential for micromanagement by member states. 

Most Governing Bodies Lack Direct Information from the Internal Audit 
Offices on the Adequacy of the Audit Offices' Resources and Capacity to 
Conduct Oversight: 

Most governing bodies of the six UN organizations we examined are not 
provided with information directly from the internal audit offices on 
the adequacy of the audit offices' staffing and financial resources; as 
a result, the governing bodies may be unaware of the audit offices' 
capacity to conduct effective oversight. WHO's governing body does 
receive this information through its Program, Budget and Administration 
Committee. According to international auditing standards, an internal 
audit office should have sufficient resources to effectively achieve 
its mandate. However, the internal audit officials must rely on senior 
management to ensure that they have sufficient resources to conduct 
their planned audits. 

Several UN audit officials stated that they had expressed the need for 
additional resources to senior management officials who can grant or 
deny their funding request, depending on the budgetary situation of the 
organization and senior management's commitment to oversight issues. 
For example, ILO audit officials stated that over the past several 
years, they had requested resources to hire an investigator, but until 
this year, no action had been taken. In March 2007, the governing body 
approved ILO's 2008-2009 budget request, which sought additional funds 
for its internal audit office; according to ILO's chief internal 
auditor, ILO will use the additional oversight resources to employ a 
qualified and experienced investigator. While the governing bodies 
approve the organizations' overall budgets, in general they do not see 
the internal audit office's budget, staff size, and results of resource 
needs assessments. Therefore, the governing bodies may be unaware of 
the internal audit offices' requests for additional resources. For 
example, although UNICEF officials told us that the audit office lacks 
adequate resources to address high-risk areas and that UNICEF's audit 
chief submits an annual report directly to its governing body, the 
audit chief did not communicate this deficiency to its governing body 
when it had the opportunity to do so in its June 2006 annual report on 
its internal audit activities. As a result, the governing body may not 
be aware of the audit chief's concerns. 

Most Audit Committees Are Not Aligned with Best Practices: 

Although five of the six UN organizations that we examined have 
established audit committees, the accountability structure and 
composition of four of these audit committees are not aligned with 
IIA's best practices.[Footnote 42] According to IIA, an independent 
audit committee is considered critical to help ensure that the 
organization has strong and effective processes related to 
independence, internal control, risk management, compliance, ethics, 
and financial disclosure. Figure 7 depicts the purpose, membership, and 
responsibilities of an audit committee, according to best practices. 
Best practices also suggest that the governing body approve the 
functions and responsibilities of the audit committee. In addition, 
members of the audit committee should understand accounting principles, 
financial statements, and internal controls. According to IIA, an audit 
committee's responsibilities are to review the proposed budgets of the 
internal oversight offices, make recommendations to the governing body 
on the level of resources needed for internal oversight, and provide a 
level of independence from the organization's senior management. 
Moreover, an independent audit committee provides the governing body 
with an independent and objective assessment of audits of the 
organization's financial statements and the internal auditors' 
performance. Of the six UN organizations, only WHO's PBAC has an audit 
committee structure that includes many of IIA's best practices. 

Figure 7: Audit Committee Purpose, Membership, and Responsibilities 
According to Best Practices: 

[See PDF for image] - graphic text: 

Source: GAO analysis of IIA guidance. 

[End of figure] - graphic text: 

Although five of the six UN organizations that we examined have 
established audit committees, the accountability structure and 
composition of four of these audit committees are not aligned with the 
IIA best practices. Specifically, most audit committees, except for 
WHO's, are neither independent of senior management nor accountable to 
the governing body, and most include senior management officials rather 
than exclusively external financial experts. WHO's PBAC functions as an 
audit committee and is generally aligned with IIA's best 
practices.[Footnote 43] The PBAC is composed of 14 of WHO's governing 
body members and is accountable to WHO's entire governing 
body.[Footnote 44] In addition, WHO's PBAC independently provides 
information on the effectiveness and capacity of WHO's internal audit 
office directly to the full governing body. In contrast, according to 
the audit committee charters of FAO's, UNDP's, UNICEF's, and WFP's, 
their audit committees are accountable to the heads of their respective 
organizations and not to their respective governing bodies. In 
addition, these committees do not independently report on the 
effectiveness and capacity of the organization's internal audit office 
directly to their respective governing bodies, as IIA suggests. 
Although all four audit committees provide reports summarizing their 
work to the governing bodies, FAO's, UNICEF's, and WFP's audit 
committees issue their reports to their respective organization heads 
who provide a copy to the governing body. In contrast, UNDP's audit 
committee charter allows the committee to independently submit its 
annual report to its governing body. Without an independent and 
knowledgeable audit committee, senior management's opinion could 
override that of the audit committee. As a result, a governing body 
would not have the benefit of an audit committee's assistance in 
ensuring that an organization has implemented effective oversight 
practices. Figure 8 illustrates the differences between the current 
practice of the four UN organizations without independent audit 
committees and IIA's best practice accountability structure for the 
audit committee, governing body, senior management, external auditor, 
and internal audit office. 

Figure 8: Differences between Current Practice for Most of the UN 
Organizations and IIA's Best Practice Accountability Structure for 
Audit Committees: 

[See PDF for image] - graphic text: 

Source: GAO analysis of UN data and IIA guidance. 

[End of figure] - graphic text: 

Most Audit Committees Are Not Accountable to Their Governing Bodies: 

The audit committees at four of the five organizations that have audit 
committees are not accountable to their governing bodies, despite IIA's 
recommendation that the audit committee report regularly to the 
governing body. As previously stated, WHO's PBAC (audit committee) is 
composed of members of its governing body, and it is accountable to the 
governing body. According to their charters, UNDP's and WFP's audit 
committee chairpersons may present their annual reports to their 
respective governing bodies. However, UNDP's audit committee was newly 
reconstituted in 2006 and has not issued its first annual report, so 
UNDP's governing body has not had the opportunity to request that the 
audit committee chairperson present it. Although WFP's governing body 
received the audit committee's first annual report in 2005, the 
contents of the report were not discussed at WFP's governing body 
meetings. WFP's audit committee did not release its annual report in 
2006, so the chairman has not had the opportunity to present it. 
Although WFP's audit committee charter specifies that the chairman 
shall present an audit committee report annually[Footnote 45] to the 
governing body, the chairman believes there is insufficient interaction 
between the committee and the governing body. In 2006, WFP's external 
auditor recommended that the governing body formally acknowledge the 
role and mandate of the audit committee to reinforce the independence 
of such a committee and to ensure a closer alignment of WFP's 
arrangements with best practices in governance. A member of WFP's 
governing body stated that the governing body has begun discussing what 
role, if any, the audit committee should have in the organization and 
what type of relationship it should have with the governing body. The 
governing body members have not reached consensus on this matter. At 
FAO and UNICEF, the extent to which the audit committee interacts with 
the governing body is unclear. The relationship of FAO's audit 
committee to its governing body is not mentioned in its charter. One 
FAO governing body representative stated that he was unaware of the 
activities and composition of FAO's audit committee, and that there was 
no formal interaction between the audit committee and the governing 
body. UNICEF's audit committee charter specifies that its audit 
committee is expected to maintain free and open communication with BOA, 
the internal audit office, and UNICEF senior management, and that it 
may consult the head of the governing body only in exceptional 
circumstances. 

Some Audit Committees Are Composed of Senior Management Officials: 

At three of the UN organizations that we examined, the organizations' 
senior management officials are members of the audit committees, and 
the audit committees are not always composed of financial experts. IIA 
recommends that the audit committee be composed of external members who 
have expertise in accounting and financial matters. Figure 9 provides 
information on the current composition and accountability structure of 
the UN audit committees that we studied. UNDP has an audit committee 
that is composed entirely of external members who have oversight or 
financial backgrounds, but it is not accountable to the governing body. 
WHO's audit committee is composed of 14 of its governing body members, 
2 from each of its 6 geographical regions, plus a chairman and a vice- 
chairman who are ex officio members. UNICEF's, WFP's, and FAO's audit 
committee charters allow for the inclusion of senior management 
officials on the committee. Whereas UNDP's, UNICEF's, and WFP's audit 
committee charters specify that the chairperson shall be a member 
external to the organization, FAO's audit committee charter specifies 
that the audit chairperson shall be the Deputy Director General. 

Figure 9: Audit Committees at the Six UN Organizations That We 
Examined: 

[See PDF for image] - graphic text: 

Source: GAO analysis of UN data. 

[A] In 2004, WHO's Administration, Budget and Finance Committee, the 
Audit Committee, and the Programme Development Committee merged into a 
single committee. 

[End of figure] - graphic text: 

Some Organizations Are Considering the Establishment of Audit 
Committees That Are Aligned with Best Practices: 

An independent audit committee could assist the governing body in 
monitoring the organization's oversight functions. In the absence of 
such an audit committee, many member state representatives said that 
they find such monitoring to be difficult because they lack sufficient 
resources and expertise. The majority of the member state 
representatives are responsible for programmatic and policy issues 
within several UN organizations, and many said that they consider 
oversight issues secondary to programmatic issues. In addition, some 
representatives told us that the highly technical aspects of auditing 
make it difficult for them to question or challenge audit practices. As 
a result, some member states are not actively engaged in monitoring UN 
oversight organizations due to impediments in the existing governance 
structure and the lack of resources and expertise. However, an 
independent audit committee could provide the governing body with an 
independent assessment of the organizations' financial statements and 
the internal auditors' performance. 

Some organizations have begun discussing whether to establish audit 
committees that are aligned with IIA best practices. According to WHO, 
its PBAC, which acts as its audit committee, fulfills most of the 
requirements of an audit committee. Its audit committee was created by 
the member states, and it is independent from senior management and is 
accountable to the governing body. In addition, among other things, 
PBAC reviews the work plan of the internal audit office and the 
external auditor; reviews the internal audit staffing and ensures that 
the function has adequate resources; reviews periodic reports of 
internal audit, including annual reports summarizing audit findings and 
progress on implementation of internal and external audit 
recommendations. However, WHO's chief internal auditor does not have a 
direct organizational reporting line to the PBAC, but rather reports 
directly to WHO's Director-General. IIA's guidance provides that the 
internal auditor should have the organizational independence to allow 
the audit activity to conduct work without interference by the entity 
under audit. By reporting organizationally to WHO's Director-General, 
rather than to the PBAC, the chief internal auditor does not have a 
level of organizational independence that is consistent with IIA's 
guidance. The member states of ILO's governing body and its external 
auditor recommended that ILO establish an audit committee. In response, 
ILO is currently making progress toward establishing an independent 
oversight advisory committee that could be in line with best practices 
and accountable to the governing body and entirely composed of external 
members, if implemented as proposed. For example, in March 2007, ILO 
submitted a proposal to its governing body to consider establishing an 
independent oversight committee, but the governing body has not yet 
reached consensus on this matter. In addition, FAO's senior management 
is taking steps to reconstitute its audit committee by 2008 so that the 
committee is composed entirely of external members; however, the audit 
committee will still be accountable to the head of the organization, 
rather than to the governing body, according to a senior FAO official. 
Moreover, WFP's senior management indicated that it would be open to 
adopting an external audit committee that conforms to IIA's best 
practices, and WFP's current audit committee chairman concurred with 
this view. 

Conclusions: 

The governing bodies of the UN funds and programs and specialized 
agencies are responsible for providing effective oversight and 
accountability for the billions of dollars provided annually by member 
states, including the United States, to support a wide range of 
activities globally. Since UN organizations are funded with government 
resources, it is essential that member states have measures in place 
that provide timely, independent, and comprehensive information on the 
operational effectiveness and efficiency of their programs. Independent 
and adequately resourced oversight mechanisms that employ international 
accountability standards and best practices are an integral part of 
organizations and can provide the governing bodies with reasonable 
assurance that the UN organizations' funds are being used as intended. 
For various reasons, existing internal oversight mechanisms within the 
six UN organizations that we reviewed had not fully implemented some 
key components of internationally accepted standards and best 
practices. This condition hinders them from carrying out some of their 
oversight responsibilities as defined by the governing bodies of their 
respective organizations. In addition, because key internal oversight 
structures, such as audit committees, do not report directly to the 
governing bodies, the organizations' good governance practices are 
hampered. Without the insights provided by access to internal audit 
reports, an independent audit committee, and an internal audit activity 
with a high level of independence, the governing bodies could face 
challenges in fully executing their responsibilities of monitoring the 
effective and efficient use of resources, senior management's actions, 
and the organization's operations. 

Recommendations for Executive Action: 

To improve oversight in UN organizations, we are making recommendations 
to the Secretary of State to direct the U.S. Missions to work with 
member states by taking the following two actions: 

* Make internal audit reports available to the governing bodies to 
provide further insight into the operations of the United Nations' 
organizations and identify critical systemic weaknesses. 

* Establish independent audit committees that are accountable to their 
governing bodies, where this currently does not occur. Audit committee 
oversight responsibilities could include the following: 

- ensuring communication and reporting lines between the head of 
internal audit and the audit committee, 

- reviewing internal audit staffing and ensuring that the function has 
the necessary resources, 

- reviewing and assessing the annual internal audit plan, 

- reviewing management's responsiveness to internal audit findings, 
and: 

- monitoring and assessing internal audit effectiveness. 

Agency Comments and Our Evaluation: 

We requested and received comments on a draft of this report from the 
Secretary of State and cognizant officials representing the six UN- 
affiliated agencies that we reviewed--FAO, ILO, UNDP, UNICEF, WFP, and 
WHO. These comments are reprinted in appendixes II through VIII, along 
with our responses to specific points. State, FAO, UNDP, WFP, and WHO 
generally agreed with the findings, conclusions, and recommendations. 
ILO commented that it has serious reservations about implementing our 
recommendation to make internal audit reports available to governing 
bodies. UNICEF expressed concerns about our recommendation to establish 
independent audit committees that are accountable to their governing 
bodies. State and the six UN-affiliated agencies submitted technical 
comments that we have incorporated into this report, as appropriate. 

State endorsed the main findings and conclusions of our report. 
Specifically, State fully agreed that members of the governing bodies 
should have access to reports and that the establishment of independent 
audit committees that meet international best practices would 
strengthen governance. State also noted that our report accurately 
recognizes that this goal will require the United States to work with 
other member states to build support. According to State, the United 
States has established partnerships with several other like-minded 
member states, and will continue to work with them to build a 
constituency for strengthening oversight and accountability in the UN 
system. 

FAO stated that our report observations are clear, comprehensive, and 
well-reasoned. The organization also said that the report's thrust 
toward instituting further best practices is considered timely and 
consistent with the approach that FAO has been observing in recent 
years. In addition, regarding the recommendation on the sharing of 
internal audit reports, FAO said that this matter is currently under 
consideration by both the FAO governing bodies and by the Chief 
Executives' Board for Coordination of the UN system. Furthermore, 
regarding our recommendation on establishing an independent audit 
committee that is accountable to these entities' governing bodies, FAO 
stated that from 2008 onwards, the FAO audit committee will be composed 
solely of external members who will act in an advisory capacity to the 
FAO Director-General. 

UNDP stated that it has taken note of the recommendations put forth in 
the report. Also, UNDP stated that it is reviewing these 
recommendations, and that these will be part of the interaction with 
the Executive Board during June 2007. 

WFP stated that the report is a useful contribution to the ongoing 
debate on enhancing oversight and accountability in the UN system. 
Specifically, WFP noted that the substance of our recommendations is 
currently being debated in many forums throughout the UN system. In 
addition, WFP noted that its Executive Board and its bureau have been 
engaged in considering issues related to the composition and reporting 
lines of the audit committee. 

WHO commented that it is engaged with other organizations in the UN 
system in addressing the issue of access to internal audit reports. The 
organization noted that while it supports the concept of transparency, 
there is a need to balance the sharing of information against the need 
to protect privileged information and the rights of staff members. In 
addition, WHO noted that its PBAC already fulfills most of the 
requirements that we advocate, such as independence from senior 
management and accountability to the governing body. Upon receipt of 
WHO's technical comments, our report was updated to reflect that WHO 
has a PBAC that operates similarly to an audit committee. Furthermore, 
WHO stated that IIA's best practice accountability structure 
illustrated in our report would effectively create a second external 
auditor, which would not be a workable solution. We disagree that the 
IIA guidance would create an external auditor and leave the Director- 
General without an internal audit function. Specifically, IIA guidance 
on the key elements of an effective public sector audit activity, which 
would apply to the internal audit activity at WHO, provides that at a 
minimum, the audit activity needs to have organizational independence 
that allows audit work that is without interference by the entity under 
audit and is seen to be independent as well. The IIA guidance states 
that this organizational independence contributes to the accuracy of 
the auditors' work and the ability to rely on the audit results. By 
having the WHO internal audit activity report organizationally to the 
PBAC, which serves as the audit committee for WHO's governing body, the 
independence of internal audits of the Director-General's programs and 
responsibilities would be enhanced significantly. In addition, the 
Director-General would continue to have an internal audit function, but 
it would be reporting organizationally to the PBAC of the governing 
body. 

ILO noted that our report did not sufficiently reflect actions taken by 
ILO to address issues highlighted regarding inadequacy of audit 
staffing levels; lack of an organizationwide risk-management framework; 
and lack of access to internal audit reports and other information by 
the governing body, audit staff financial disclosure, and an audit 
committee. Our report was updated after receipt of ILO's technical 
comments to reflect information provided by the organization regarding 
several of these issues, including adequacy of resources, financial 
disclosure, and the proposal submitted by the Director-General to ILO's 
governing body calling for the creation of an independent audit 
committee. In addition, ILO stated that the report does not reflect the 
process that ILO has in place concerning the provision of access to 
information. We updated our report to reflect information provided in 
ILO's technical comments about this process. Furthermore, ILO commented 
that it has serious reservations about implementing the recommendation 
regarding making internal audit reports available to governing bodies. 
We maintain that providing the governing body with access to all 
internal audit reports will provide the governing body greater insight 
into the organization's operations and highlight systemic weaknesses in 
internal controls. 

UNICEF noted that many of the issues raised in our report are for 
consideration by the UNICEF Executive Board, and UNICEF recognizes the 
importance of ensuring that any discussion of such issues takes place 
within the jurisdiction of the UNICEF Executive Board. Regarding the 
recommendation of making internal audit reports available to the 
governing body and audit committee, UNICEF stated that its Executive 
Board has requested that UNICEF further enhance the level of analysis 
in the publicly available annual report of UNICEF's Office of Internal 
Audit; include management responses to the key and recurring issues 
identified by the Office of Internal Audit; and assess and report on 
the resources required for the internal audit function. In addition, 
UNICEF noted that any proposal to reorder the governance mechanisms so 
as to align them with a particular understanding of the IIA standards 
would be a matter for the UNICEF Executive Board (among other 
institutions). We recognize that decisions regarding changes in 
UNICEF's lines of reporting to allow UNICEF's governing body access to 
all audit reports, as well as the creation of an independent audit 
committee to be in line with international best practices, will require 
the consideration and approval of UNICEF's Executive Board. We also 
maintain that the United States, as a member of UNICEF's governing 
body, should work with other member states to consider and implement 
these recommendations. 

We are sending copies of this report to interested congressional 
committees, the Secretary of State, and the U.S. Permanent 
Representative to the United Nations. We will also make copies 
available to others upon request. In addition, the report will be 
available at no charge on the GAO Web site at [Hyperlink, 
http://www.gao.gov]. 

If you or your staffs have any questions about this report, please 
contact me at (202) 512-9601 or melitot@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs can be found on 
the last page of this report. GAO staff who made major contributions to 
this report are listed in appendix IX. 

Signed by: 

Thomas Melito: 
Director, International Affairs and Trade: 

[End of section] 

Appendix I: Scope and Methodology: 

Our objectives were to examine the extent to which (1) internal audit 
offices have implemented professional standards for performing audits 
and investigation, (2) evaluation offices have implemented United 
Nations (UN) evaluation standards and norms, and (3) governing bodies 
are provided with information about the results of UN oversight 
practices. For our review, we selected 6 UN organizations from among 
the 10 funds and programs and 15 specialized agencies that comprise the 
universe of all UN funds and programs and specialized agencies. On the 
basis of their budgets for biennium 2004-2005, we selected the 3 
largest funds and programs and 3 of the largest specialized 
agencies.[Footnote 46] Therefore, our results cannot be generalized to 
the full universe of all funds and programs and specialized agencies 
and may not represent the practices of the smaller UN organizations. 
The funds and programs we selected include the United Nations 
Development Program (UNDP), the United Nations Children's Fund 
(UNICEF), and the World Food Program (WFP). The specialized agencies we 
selected include the Food and Agriculture Organization (FAO), the 
International Labor Organization (ILO), and the World Health 
Organization (WHO).  

To examine the extent to which the six organizations' internal audit 
offices have implemented professional standards for performing audits, 
we reviewed relevant standards issued by the Institute for Internal 
Auditors (IIA), which is recognized as the internal audit profession's 
leader in certification, education, research, and technological 
guidance. IIA provides comprehensive guidance for the profession 
through its Professional Practice Framework, including the 
International Standards for the Professional Practice of Internal 
Auditing, which outlines the tenets of the internal audit profession 
and The Role of Auditing in Public Sector Governance, which provides 
guidance to all levels of government. The six UN organizations that we 
examined have adopted the IIA standards. To conduct our review, we 
selected key audit standards that were based on previous GAO 
work.[Footnote 47] Specifically, we (1) selected standards relating to 
risk-management framework, risk-based audit work plans, resource 
management, quality assurance, recommendation monitoring, and ethics 
practices and (2) assessed the extent to which these six organizations' 
practices were consistent with these standards. We examined documents 
from the six organizations, including reports prepared by the 
organizations' external auditors, external peer reviewers, and audit 
committees, as well as reports prepared by the chief audit executives 
for senior management and governing bodies. In addition, we conducted 
interviews with various officials, including officials of the internal 
audit offices, finance division, audit committees, legal offices, and 
external auditors. We did not perform independent assessments of the 
organizations' audit functions. Our reviews were limited to reviews of 
documents and interviews with the various officials. For example, to 
assess whether the internal audit offices had sufficient resources to 
conduct their risk-based work plan, we based our findings on interviews 
with the organizations' audit officials and their external auditors' 
assessment of the adequacy of the organizations' audit coverage. 

Regarding investigations, the six UN organizations we examined have 
adopted the UN Uniform Guidelines for Investigations, which are 
intended to be used as guidance in the conduct of investigations in 
conjunction with each organization's rules and regulations. In 
particular, we focused on the guideline that states that the planning 
and conduct of the investigation should reasonably ensure that 
resources devoted to investigations are proportionate to the allegation 
because having resources for investigations is fundamental to probe 
allegations of wrongdoing. To assess the extent to which investigative 
resources were sufficient, we examined documents from the six 
organizations, including reports prepared by the organizations' 
external auditors, annual reports of the oversight unit chiefs to the 
head of the organization, and the audit committees' reports, where 
applicable. In addition, we conducted interviews with various 
officials, including external auditors, internal auditors, and 
investigators, where applicable. We did not perform independent 
assessments of the organizations' investigative functions. To assess 
the organizations' efforts to adopt financial disclosure and 
whistleblower policies, we examined their policies and procedures and 
spoke with relevant officials, including officials from the 
organizations' human resources, legal, and oversight units. All UN 
employees are subject to standards for ethical conduct established by 
the International Civil Service Board. In addition, each oversight 
function--audit, investigations, and evaluations--is guided by its 
respective professional standards. IIA has developed standards to guide 
the ethical conduct of auditors. The UN Uniform Guidelines for 
Investigations applies specifically to investigators. The UN Evaluation 
Group is currently drafting its own set of ethical guidelines for UN 
evaluation staff. The International Civil Service Board, IIA, and the 
UN Uniform Guidelines for Investigations all address the need for staff 
to avoid conflicts of interest and disclose any such impairments. The 
UN Uniform Guidelines for Investigations recommends the practice of 
protecting the identities of those who make complaints to the 
investigative office. 

To examine the extent to which the six organizations' evaluation 
offices have implemented UN evaluation norms and standards, we reviewed 
the relevant standards and norms issued by the UN Evaluation Group 
(UNEG). UNEG adopted these norms and standards in 2005 in an attempt to 
professionalize the evaluation function and provide guidance to 
evaluation offices in preparing their evaluation policies or other 
aspects of their operations. Norms are the guiding principles for 
evaluating the results achieved by the UN system, the performance of 
the organizations, the governance of the evaluation function within 
each organization of the UN system, and the value-added use of the 
evaluation function. A set of standards complementing these norms has 
been drawn from the best practices of UNEG members, Organization of 
Economic Cooperation and Development (OECD)/Development Assistance 
Committee evaluation principles, national standards of OECD countries, 
evaluation policies of the international financial institutions, 
evaluation policies of the European Union, standards of evaluation 
associations, and evaluation guidance developed by the Active Learning 
Network for Accountability and Performance in Humanitarian Action. 
These standards are intended to guide the establishment of the 
institutional framework, management of the evaluation function, and 
conduct and use of evaluations. UNEG conducted a baseline assessment of 
its evaluation office members in 2005; however, we could not obtain 
access to this information. Only UNDP's and UNICEF's evaluation offices 
have had external assessments performed on the basis of these standards 
and norms.[Footnote 48] To conduct our review, we selected standards 
and norms relating to ensuring the adequacy of financial and human 
resources, competency of staff, quality assurances processes, and 
recommendations follow-up. To the extent possible, we based our review 
on those standards and norms that matched key audit standards. Although 
we did not assess the quality of evaluations conducted, we did examine 
whether processes to help ensure quality were in place. Time and 
resource constraints limited our ability to evaluate organizations' 
implementation of the other UNEG standards and norms. We examined 
documents from the six organizations, including reports prepared by the 
organizations' evaluation offices and external peer reviewers, and 
annual reports of the evaluation offices. In addition, we conducted 
interviews with various officials of the evaluation offices. We did not 
perform independent assessments of the organizations' evaluation 
function. 

To assess the organizations' efforts to implement professional 
standards, guidelines, and norms for audit, ethics, and evaluations, 
and to assess the sufficiency of the organizations' investigative 
resources, we developed the following scale: 

1. Generally implemented: Evidence of a series of actions that indicate 
the standards, norms, or guidelines are generally or mostly 
implemented. 

2. Partially implemented: Evidence of some actions taken toward 
implementation. 

3. Not implemented: Evidence that no steps have been taken to implement 
the standards, norms, or guidelines. 

4. Not clear: Insufficient or conflicting information regarding status 
in implementing the standards, norms, or guidelines. 

Three GAO staff used this scale to assess the organizations' 
performance and sufficiency of their resources independently of each 
other. These staff then met to reconcile any differences in their 
initial assessments. 

To examine the extent to which governing bodies are provided 
information about the results of UN oversight practices, we reviewed 
documents from the six organizations, including reports prepared by the 
organizations' external auditors, the oversight unit chiefs, the 
governing bodies, and the audit committees, where applicable. We also 
examined the charters of the audit offices and the audit committees, 
where applicable. In addition, we reviewed relevant guidance regarding 
audit committees issued by IIA. Furthermore, we conducted interviews 
with various officials, including internal audit officials, external 
auditors, and members of the audit committees, where applicable. We 
also interviewed selected representatives from UN member states, 
including representatives from the U.S. UN missions in Geneva, Rome, 
and New York and U.S. representatives to the governing bodies of the UN 
organizations we examined. In Geneva, we spoke with members of the 
Geneva Group,[Footnote 49] including representatives from the United 
Kingdom, Canada, the Netherlands, Australia, and Germany. In Rome, we 
spoke with additional members of the Geneva Group, including 
representatives from the United Kingdom, Spain, Canada, Sweden, South 
Korea, Germany, Switzerland, Finland, Italy, France, Russia, New 
Zealand, Japan, and the Netherlands. In addition, we met with 
representatives of the Group of 77[Footnote 50] from Zimbabwe, 
Madagascar, Iraq, Dominican Republic, Bangladesh, Brazil, Cameroon, 
China, Egypt, Kuwait, Nicaragua, Peru, the Philippines, Sri Lanka, and 
Thailand. In New York, we spoke with mission representatives to the UN 
from Belgium, Australia, the United Kingdom, Canada, Japan, and 
Pakistan. 

Furthermore, to address our objectives, we spoke with senior officials 
from the Departments of State (State) and Labor in Washington, D.C., 
and senior officials from State, Labor, Health and Human Services, and 
the U.S. Agency for International Development at the U.S. Missions to 
the United Nations in Geneva, Rome, and New York. At these locations, 
we met with management and staff responsible for governance and 
oversight at FAO, ILO, UNDP, UNICEF, WFP, and WHO. In addition, for 
information on the budget and staff resources of these six 
organizations, we used fiscal biennium 2006-2007 data provided by these 
organizations. We determined that these data were sufficiently reliable 
for the purposes of this report. 

We conducted our work from June 2006 through March 2007 in accordance 
with generally accepted government auditing standards. 

[End of section] 

Appendix II: Comments from the Department of State: 

United States Department of State: 
Assistant Secretary for Resource Management and Chief Financial 
Officer: 
Washington, D.C. 20520: 

Ms. Jacquelyn Williams-Bridgers: 
Managing Director: 
International Affairs and Trade: 
Government Accountability Office: 
441 G Street, N. W. 
Washington, D.C. 20548-0001: 

May 17 2001: 

Dear Ms. Williams-Bridgers: 

We appreciate the opportunity to review your draft report, 

"United Nations: Oversight and Accountability Could Be Strengthened by 
Further Instituting International Best Practices," GAO Job Code 320442. 

The enclosed Department of State comments are provided for 
incorporation with this letter as an appendix to the final report. 

If you have any questions concerning this response, please contact 
Matthew Glockner, Program Analyst, Bureau of International Organization 
Affairs, at (202) 647-6413. 

Sincerely, 

Signed by: 

Bradford R. Higgins: 

cc: GAO - Tom Melito: 
IO - Kristen Silverberg: 
State/OIG - Mark Duda: 

Department of State Comments on GAO Draft Report United Nations: 
Oversight and Accountability Could Be Strengthened the by Further 
Instituting International Best Practices (GAO-07-597, GAO Code 320442): 

Thank you for the opportunity to comment on your draft report entitled 
UNITED NATIONS: Oversight and Accountability Could Be Strengthened by 
Further Instituting International Best Practices. The Department of 
State has long been a strong supporter of oversight and accountability 
in the UN system and welcomes the GAO report on this subject. The 
report provides timely information on several aspects of the internal 
oversight functions at the World Health Organization (WHO), 
International Labor Organization (ILO), Food and Agriculture 
Organization (FAO), United Nations Development Program (UNDP), United 
Nations Children's Fund (UNICEF), and World Food Program (WFP). A 
previous GAO report (GAO-06-575) examined the UN Office of Internal 
Oversight Services (OIOS). This subsequent review provides a fuller 
understanding of how internal oversight is conducted in the broader UN 
system. 

The Department of State endorses the main findings and conclusions of 
the GAO report. We appreciate that the GAO examined the extent to which 
the internal oversight functions of WHO, ILO, FAO, UNDP, UNICEF, and 
WFP comply with key aspects of the professional standards of the 
Institute of Internal Auditors (IIA), the United Nations Uniform 
Guidelines for Investigations, and the Standards and Norms of the 
United Nations Evaluation Group (UNEG). We fully agree that members of 
Governing Bodies should have access to reports and that the 
establishment of independent audit committees that meet international 
best practices would strengthen governance. In this respect, we agree 
that audit committees should be accountable to their respective 
Governing Bodies and not to senior management. The practice of making 
reports available upon request is necessary for Member States to 
exercise their fiduciary responsibilities more effectively and has 
helped provide insight into critical systemic weaknesses at the UN. The 
Department of State has sought to obtain the agreement of the Funds and 
Programs and Specialized Agencies to release internal audits and other 
oversight reports. Through our efforts at individual UN entities and 
with the assistance of the UN Secretary-General, we are making progress 
within the entire UN system towards this goal. 

The GAO makes several observations concerning the resources needed to 
carry out internal oversight and notes that some offices lack adequate 
resources. The Department of State was indeed deeply concerned when 
UNDP's Office of Audit and Performance Review did not have sufficient 
resources in the third quarter of 2006 to perform its planned 
activities, and we expressed our concern with the UNDP Administrator. 
Although UNDP later provided $1.4 million in additional resources, the 
situation highlights the critical importance of ensuring that 
sufficient resources are provided for internal oversight. The 
Department of State has been seeking to establish independent oversight 
committees system-wide that meet international best practices. We 
believe that the ability of the internal oversight functions to submit 
their budget requests to their respective Governing Bodies through an 
independent committee will help alleviate this problem and will also 
assist in increasing the operational independence of those oversight 
bodies, most of which report and are accountable to the Executive Head. 

Furthermore, we believe that the committee's mandate should encompass 
the full range of oversight activities, and we have been calling for 
Member States to grant oversight committees authority to assess the 
budgets, plans, and operations of the audit functions, as well as 
investigations and evaluations. In this respect, the Department of 
State concurs with the GAO's findings and concerns regarding the 
failure of most of the entities to utilize professional investigators 
and the lack of sufficient resources to manage and conduct evaluations. 
We believe that a mandate that includes responsibility for 
investigations and evaluations will help address these issues. 

The GAO also observes that the UN entities that were the subject of 
this review have yet to complete organization-wide risk assessments. 
The GAO correctly recognizes that senior management, with the 
assistance of the internal audit function, is responsible for 
establishing the risk management framework. We fully concur with GAO 
that risk management not only enables the internal audit function to 
plan more effectively, but also helps the organization to develop a 
plan for identifying and decreasing its vulnerability to threats that 
could negatively impact its resources and reputation. 

The Department of State agrees with GAO's finding that enhanced ethics 
policies could strengthen oversight and that more could be done with 
respect to financial disclosure programs and whistleblower protections. 
The Department of State agrees with GAO's finding related to financial 
disclosures that internal oversight professionals should be required to 
disclose their financial interests. Although we are unaware of any 
specific cases of impairments to the independence of oversight staff, 
we believe that financial disclosure statements are essential to 
ensuring the integrity of the internal oversight function by helping to 
identify conflicts of interest in fact or perception. We have called 
upon UN entities to require financial disclosures for all oversight 
professionals, as well as for staff with fiduciary responsibilities. 
Furthermore, the Department of State believes that an annual 
attestation of independence, in addition to a financial disclosure, 
would further enhance the perception of objectivity and credibility of 
the oversight function. We recognize that the IIA's International 
Standards for the Professional Practice of Internal Auditing do not 
require audit professionals to make either a financial disclosure or an 
attestation of independence, and the United States may face resistance 
in seeking a more rigorous approach. Furthermore, we recognize that the 
UN requirement for financial disclosure statements relates only to the 
UN Secretariat and covers the staff of OIOS. Other UN entities are 
launching similar initiatives, and we will seek to ensure that these 
programs also cover their respective oversight professionals. 

As the GAO report illustrates, oversight is important to ensuring the 
credibility and reputation of UN entities. Strengthening internal 
oversight is part of the U.S. government's overall objective of 
promoting sound management in the UN system. The report accurately 
recognizes that this goal will require the United States to work with 
other Member States to build support. The United States has established 
several partnerships with other like-minded Member States, and we will 
continue to work with these nations to build a constituency for 
strengthening oversight and accountability in the UN system. 

[End of section] 

Appendix III: Comments from the Food and Agriculture Organization: 

Comments from the Food and Agriculture Organization: 

Rome, 9 May 2007: 

Dear Sir/Madam, 

FAO's response to the GAO report on UN Oversight: 

We wish to thank the GAO for giving FAO the opportunity to review the 
above report and to provide its comments and clarification.

Please find FAO's comments on the observations made in the report 
attached as an Annex. 

Yours sincerely, 

Signed by: 

A, Lo Faso: 
Inspector General: 
AUD: 

Signed by: 

J. Markie: 
Chief, Evaluation Service: 
PBEE: 

U.S. Government Accountability Office: 
441 G Street, Room 4G46: 
Washington, DC 20548: 

Appendix IV: Comments from FAD: 

Audit and Investigation: 

We have carefully studied the report and welcome the various comments 
and observations contained therein. They are clear, comprehensive and 
well reasoned. The detailed comparative information provided on the 
oversight function in the various agencies is also helpful and 
interesting. The report's thrust towards instituting further best 
practices is considered timely and consistent with the approach that 
FAD has been observing in recent years. 

We note that the report essentially proposes two main areas for 
consideration: 

* making internal audit reports available to the governing bodies: 

* establishing independent audit committees: 

We would mention that similar proposals have been discussed at various 
fora in the past by the Organization's governing bodies, Therefore, in 
that sense, FAD is familiar with these proposals. However, as you 
probably well know, in the context of the UN, matters such as these 
would require to be studied further by FAD management in consultation 
with, and involvement of, its governing bodies before a considered 
decision can be taken to determine the best and most beneficial course 
of action for the Organization. Accordingly, these matters will be 
taken up as appropriate, within the established mechanisms and 
deliberations of the Organization, The sharing of internal audit 
reports with the governing bodies was discussed by the FAD Finance 
Committee in 2006. This matter is currently under consideration by both 
the FAD governing bodies and by the Chief Executives' Board for 
Coordination of the UN system, In addition, from 2008 onwards, the FAD 
audit committee will be composed solely of external members, who will 
act in an advisory capacity to the FAD Director General. 

The comments and recommendations on the work practices of the audit 
function have been noted. The FAD internal audit and investigation 
function is committed to fully comply with International Standards for 
the Professional Practice of Internal Auditing promulgated by the 
Institute of Internal Auditors, USA (IIA) and with best work practices. 
In fact, with this in mind, considerable progress has been made in 
recent years to upgrade work practices, enhance audit techniques and 
methodologies, and improve staff standards and training to achieve this 
stated goat. FAD is satisfied with the progress made to date, and 
continues to strive for improvements to ensure general compliance with 
these auditing standards. 

In addition, as suggested in the report, action has already been taken 
to more clearly define and segregate the audit and investigation 
functions, and to have them staffed by appropriately qualified 
personnel. 

With regard to financial disclosure requirements for oversight staff, 
the Committee on Constitutional and Legal Matters (CCLM) has recently 
addressed the issue and agreed to allow' FAD to progressively implement 
a system of financial disclosure for senior staff and staff in 
sensitive areas. In addition, it has recommended to the Council 
modification of FAD's Staff Regulations in this regard. 

Evaluation: 

FAO found the report helpful, with respect to the comparative review of 
the evaluation function in UN organizations. As noted in the report, as 
part of the Independent External Evaluation of FAO (IEE) which wilt be 
completed in September 2007 an in-depth assessment has been made of the 
evaluation function. This is expected to result in significant 
recommendations for change and these recommendations which will be 
considered by the FAO member countries in the Governing Bodies and by 
the FAO management later this year. The Emerging Issues paper published 
by the ]LEE in April this year states "The IEE has separately evaluated 
the evaluation function in the Organization and has found that it 
provides a strong base which can be further enhanced. Recommendations 
will be made on the evaluation system and on RBM." 

[End of section] 

Appendix IV: Comments from the World Food Program: 

07 May 2007: 

World Food Programme: 
The Deputy Executive Director For Administration: 

Mr. Thomas Melito: 
Director, International Affairs and Trade: 
United States Government Accountability Office: 
Washington, DC 20548: 
U.S.A. 

Dear Mr. Melito, 

Thank you for sharing with us a draft copy of the GAO report entitled 
'United Nations: Oversight and Accountability Could Be Strengthened by 
Further Instituting International Best Practices". We found the report 
interesting and a useful contribution to the ongoing debate on 
enhancing oversight and accountability in the United Nations system 
entities. 

WFP has strived to consistently strengthen its governance and oversight 
practices to bring them in line with international best practices. In 
2003, we presented a paper to our Executive Board, highlighting the 
current best practices in oversight mechanisms in the public and the 
private sector and following the guidance received from the Board 
initiated steps to enhance corporate governance. Resultantly, 
Enterprise Risk Management was introduced with a Board approved policy 
and is now being embedded in the normal processes of WFP, the Audit 
Committee was strengthened by including majority external and 
independent members with external chair, and a request was made for 
appropriate change in staff rules and regulations to oblige key staff 
to undertake periodic conflict of interest and financial disclosure. 
You may also note that WFP strives to be IPSAS compliant by 2008. 

WFP is quite conscious of the quality and adequacy of its internal 
oversight services. Our internal audit function was reviewed by the 
Institute of Internal Auditors in 2006 and found to `generally conform'-
highest rating---to the Standards. Both the evaluation function and the 
investigation and inspection function will be peer reviewed in 2007. We 
remain committed to providing adequate resources to our oversight 
services to enable them to do their job. 

We have noted the two high level recommendations contained in the 
report. As you may be aware, the substance of these recommendations is 
currently being debated in many forums throughout the UN system. Our 
Executive Board and its Bureau has been engaged in considering issues 
related to the composition and reporting lines of the audit committee. 
It has noted the recommendations emanating from the JIU report entitled 
"Oversight Lacunae in the United Nations System" and has desired to 
consider these together with recommendations emanating from the 
"Comprehensive review of Governance and Oversight within the United 
Nations, Funds, Programmes and Specialized Agencies" later in the year. 
We look forward to receiving guidance from our governing body on these 
two and other governance related issues. 

Please accept our appreciation for the work done by the GAO team 
involved in this review. We look forward to receiving the final report 
reflecting as appropriate our technical comments provided to you by a 
separate letter. 

Yours Sincerely, 

Signed by: 

Susana Malcorra: 

The following is GAO's comment on the World Food Program's letter dated 
May 7, 2007. 

GAO Comment: 

1. WFP noted that a request was made for an appropriate change in staff 
rules and regulations to oblige key staff to undertake periodic 
conflict of interest and final disclosure. While we agree that this is 
a critical step toward fully implementing a sound ethics policy, we 
noted in this report that all staff conducting audits, investigations, 
and evaluations should be included as those defined as "key staff." 

[End of section] 

Appendix V: Comments from the World Health Organization: 

World Health Organization: 
20, Avenue Appia - CH-1211 Geneva 27 - Switzerland: 
Tel Central +41 22 791 2111: 
Fax Central +41 22 791 3111: 
Www.Wh0.Int: 
Tel. direct: +41 22 791 2919: 
Fax direct: +41 22 791 4195: 
E-mail: langfordk@who.int: 

In reply please refer to: IOS/EC: 

Your reference: 

Mr Thomas Melito: 
Director, International Affairs and Trade: 
United States Government Accountability Office: 
Washington, D.C. 20548: 
Etats-Unis d'Amerique: 

8 May 2007: 

Dear Mr Melito, 

Thank you for the opportunity to comment on the draft report entitled 
"United Nations: Oversight and Accountability Could Be Strengthened by 
Further Instituting International Best Practices" (GAO-07-597). I 
welcome the analysis performed in the report and would like to comment 
on some of the issues raised. 

We share your view concerning the need for an effective risk management 
framework. In this connection, our internal oversight office has 
recommended recently to WHO's administrative officials measures to 
improve risk management and proposed a model implementation plan. 

Although we agree with your focus on the issue of investigative staff, 
we believe that handling wrongdoing is broader and more complicated 
than simply recruiting additional investigators. In the past year, WHO 
has realized considerable progress in the area of institutional 
integrity through the publication of a strong whistleblower protection 
policy, an investigation procedures manual, a proposed code of conduct, 
and clear assignment of roles and responsibilities between legal, human 
resources and internal oversight with respect to handling of 
wrongdoing. The work continues and adequate staffing will remain a 
priority, both for investigation and other needed disciplines. 

WHO is engaged with other organizations in the UN System to address the 
issue of access to internal audit reports. We certainly support the 
concept of transparency but at the same time, this must be balanced 
against the need for protecting privileged information and the rights 
of staff members. 

In reviewing the report, I note a lack of recognition of our efforts at 
increasing transparency during the past several years. At WHO, the 
report of the internal auditor presented to the Health Assembly 
includes results from the audits undertaken, not just a summary of the 
Office's activity. The report also includes, to the extent possible, 
information on misconduct cases. Although seldom requested, WHO has an 
announced policy of providing confidential but detailed briefings on 
internal audit reports to any Member State, which could include a 
reading of the audit report. I would also mention that our financial 
rules permit the head of internal audit to release any internal audit 
report to the Executive Board. 

There is also a need to recognize the risks and consequences with 
respect to public disclosure of internal audit reports. The operational 
efficiency and effectiveness of the internal audit process can be 
reduced by changing its products from internal to external in nature. 
It further risks creating a confrontational situation where the impetus 
shifts to defending positions rather than improving process and 
results. 

Finally, with respect to the discussion on audit committees, I would 
like to point out the role of WHO's Programme Budget and Administration 
Committee (PBAC). Although the term "audit committee" is not used, the 
PBAC already fulfills most of the requirements which GAO advocates such 
as independence from senior management and accountability to the 
governing body. It is in fact a committee of the Executive Board, 
created by Member States. 

The PBAC serves as an important governance mechanism for our internal 
oversight office. It reviews the plan of work of WHO's internal auditor 
in January each year when such issues as staffing and adequacy of 
resources are discussed. It then examines the internal auditor's annual 
report to the Health Assembly when the results of audits and 
management's implementation of recommendations are considered. 

The nature and governance of an intergovernmental body contrasted to 
domestic private sector enterprises needs to be taken into account in 
considering "international best practice". The internal audit reporting 
structure suggested in Figure 7 of the report effectively creates a 
second external auditor, yet WHO Financial Regulations require the 
Director-General to maintain an internal audit function. The separation 
of authority from responsibility would not be a workable solution. 

We have furnished our technical comments under separate cover. 

Yours sincerely, 

Signed by: 

Dr Bill Kean: 
Executive Director: 
Office of the Director-General: 

The following are GAO's comments on the World Health Organization's 
letter dated May 8, 2007. 

GAO Comments: 

1. WHO commented that our report lacks recognition of its key efforts 
to increase transparency during the past several years. We updated the 
text of our report to include additional information on what is and can 
be provided by the internal auditor to the Health Assembly and member 
states. 

2. WHO commented that its Program, Budget and Administration Committee 
(PBAC) operates similarly to an independent audit committee and already 
fulfills most of the requirements that we advocate, such as 
independence from senior management and accountability to the governing 
body. We updated the text of this report to include this information. 

3. WHO stated that the IIA's best practice accountability structure 
illustrated in our report would effectively create a second external 
auditor, which would not be a workable solution. We disagree that the 
IIA guidance would create an external auditor and leave the Director- 
General without an internal audit function. The guidance focuses on the 
reporting relationship needed to achieve organizational independence 
for the internal audit function. Specifically, IIA guidance on the key 
elements of an effective public sector audit activity, which would 
apply to the internal audit activity at WHO, provides that at a 
minimum, the audit activity needs to have organizational independence 
that allows audit work that is without interference by the entity under 
audit and is seen to be independent as well. The IIA guidance states 
that this organizational independence contributes to the accuracy of 
the auditors' work and the ability to rely on the audit results. By 
having the WHO internal audit activity report organizationally to the 
PBAC, which serves as the audit committee for WHO's governing body, the 
independence of internal audits of the Director-General's programs and 
responsibilities would be enhanced significantly. In addition, the 
Director-General would continue to have an internal audit function, but 
it would be reporting organizationally to the PBAC of the governing 
body. 

[End of section] 

Appendix VI: Comments from the International Labor Organization: 

International Labour Office: 
Geneva: 
Patricia O'donovan: 
Executive Director: 
Management and Administration: 

11 May 2007: 

Dear Ms. Merritt, 

The ILO appreciates the opportunity to provide comments on the GAO 
Report entitled "United Nations: Oversight and Accountability Could Be 
Strengthened by Further Instituting International Best Practices" (GAO- 
07-597). The Office values the comments and observations of external 
agencies like the GAO on its internal audit arrangements. In 
participating in this review, the Office endeavoured to respond fully 
to all requests for information including the provision of all 
documents requested as well as arranging consultations and meetings 
with all relevant staff. 

In relation to the ILO, the report highlights issues regarding 
inadequacy of audit staffing levels (particularly with regard to 
qualified IT auditors and investigators), lack of an organization wide 
system of risk management, lack of access to internal audit reports and 
other information by the Governing Body, audit staff financial 
disclosure, and an audit committee. In the view of the Office, the 
report does not sufficiently reflect action taken by the ILO to address 
many of these concerns. 

The report refers to an overall lack of a requirement for financial 
disclosure. As the GAO review does not go beyond March 2007, I would 
like to take this opportunity to provide an update on this matter. In 
April 2007, the ILO introduced a register of financial interests for 
all senior staff (graded at D1 level and above) and other designated 
officials - including all PROCUREMENT officials. All officials covered 
by this are required to make an annual financial disclosure identifying 
potential conflicts of interests and any supplements or gifts received. 

The report gives a fair picture of the evaluation function in ILO 
including follow up on implementation of evaluation recommendations, 
and implementation of UN evaluation standards (UNEG). The GAO report 
also notes the current ILO effort to improve the quality of evaluations 
as well as the quality of evaluators, and to strengthen the internal 
capacity to manage evaluation processes. However, the Office does not 
agree with the use made in the report of the findings from the quality 
assessment exercise that was reported in the Annual Evaluation Report 
submitted to the Governing Body in November 2006. It appears that these 
results are being used against the Office. As a matter of ethics and 
good practice in evaluation, a self-evaluation report should never be 
held against its author. 

In relation to the GAO's recommendation to make internal audit reports 
available to governing bodies, the Office has serious reservations 
about implementing this recommendation for the following reasons: 

* Internal audit is by its very definition "internal." 

* It is a tool of management to support the Director-General and the 
senior management in the exercise of their management functions. 

* In the ILO, the rules authorize the CIA to bring individual audit 
reports directly to the Governing Body. The ILO considers that this 
provision addresses the main issue of concern raised by the GAO as it 
provides for direct reporting to the Governing Body on any matter that 
the CIA considers merits direct reporting. 

* The ILO Governing Body is provided with an annual summary of the 
IAO's work, including the main findings of internal audit reports. 

* Copies of all internal audit reports are shared with the External 
Auditors. 

* Where they consider it necessary and appropriate, the External 
Auditors follow up on internal audit work and can report on it to the 
Governing Body. 

* It is important to maintain the different reporting lines between 
Internal Audit and External Audit - otherwise it could lead to 
duplication, confusion and overlap in their respective roles and 
functions. 

* The ILO shares the general concern expressed by audit practitioners 
that external reporting of internal audits could result in internal 
audit reports being interpreted out of context or being "watered down" 
and therefore lessen their effectiveness and value as a management 
tool. 

* External auditors and the Institute of Internal Auditors advise 
caution in the release of internal audit reports to parties external to 
management. 

In relation to the GAO recommendation on the establishment of 
independent audit committees that are accountable to their governing 
bodies, I would like to draw attention to the fact that the proposed 
Terms of Reference for an Independent Oversight Advisory Committee 
submitted by the Director-General of the ILO to the Governing Body in 
March 2007, as well as reflecting best practice as identified by the 
GAO, also incorporate essential features as recommended by the Joint 
Inspection Unit and those adopted by the United Nations General 
Assembly. 

Finally, on a general and very important point, the report makes no 
reference to the tripartite governance structure of the ILO, apart from 
Figure 1 that describes the governance structure of the different 
agencies. This is a serious omission in the report. The unique 
tripartite governance structure of the ILO has to be taken into 
consideration when reviewing oversight and accountability in the ILO. 
It is not just a nominal structural feature. The participation of 
workers' and employers' organizations, alongside governments, in the 
governance of the ILO has a real and tangible impact on its governance. 
Unlike the other agencies covered in this review, this tripartite 
participation builds into ILO governance much greater transparency and 
accountability and this value-added should be acknowledged in this 
review. 

In conclusion, on behalf of the ILO, I wish to express our appreciation 
to the GAO team for this report. As the ILO continues to review its 
oversight and accountability arrangements, it will give full 
consideration to the observations and recommendations contained in this 
report. 

With kind regards, 

Yours sincerely: 

Signed by: 

Patricia O'Donovan: 

The following are GAO's comments on the International Labor 
organization's letter dated May 11, 2007. 

GAO Comments: 

1. ILO commented that our report did not sufficiently reflect actions
taken by ILO to address issues highlighted regarding inadequacy of
audit staffing levels, lack of an organizationwide risk-management
framework, lack of access to internal audit reports and other
information by the governing body, audit staff financial disclosure, and
an audit committee. Our report was updated after receipt of ILO’s
technical comments to reflect information provided by the organization
regarding several of these issues, including adequacy of resources,
financial disclosure, and its proposal submitted by the Director-General
to ILO’s governing body in March 2007 calling for the creation of an
independent audit committee. 

2. ILO commented that the report refers to an overall lack of a
requirement for financial disclosure. According to ILO, in February
2006, it introduced a declaration that required that all procurement
officials submit an annual declaration. In addition, in April 2007, ILO
introduced a register of financial interests for all senior staff 
(graded at D1 level and above) and other designated officials 
(procurement) requiring them to make an annual financial disclosure 
identifying potential conflicts of interest and any supplements or 
gifts received. We updated our report to reflect these actions, but 
maintain that requiring financial disclosures from all staff conducting 
audits, investigations, and evaluations is a sound practice that could 
help to ensure that employees are free from conflict of interest. 

3. ILO disagreed with our use of the findings from the quality 
assessment exercise that was published in its Annual Evaluation Report 
submitted to ILO’s Governing Body in November 2006. Consistent with our
generally accepted government auditing standards, we cite the findings
of external assessments, if publicly available and where applicable, 
that specifically relate to our reporting objectives. We do not 
independently endorse the findings of these assessments, but are 
transparent about the use of them in the scope and methodology sections 
of our report. 

4. ILO stated that it has serious reservations about implementing the
recommendation regarding making internal audit reports available to
governing bodies. We maintain that providing the governing body with
access to all internal audit reports will provide the governing body 
with greater insight into the organization’s operations and highlight 
systemic weakness in internal controls. 

5. ILO stated that the report should note that the proposed Terms of
Reference for an Independent Oversight Advisory Committe submitted
by the Director-General to ILO’s governing body in March 2007, is in 
line with the recommendation for establishing an independent audit
committee. We updated our report after receipt of ILO’s technical
comments to reflect this action. 

6. ILO commented that the report makes no reference to the tripartite
governance structure of ILO. We updated our report to include a
sentence explaining ILO’s tripartite structure. 

[End of section] 

Appendix VII: Comments from the United Nations Development Program: 

United Nations Development Programme:
Office of Audit and Performance Review: 

18 May 2007: 

Dear Madame, 

I am writing to acknowledge the draft copy of the report on "United 
Nations: Oversight and Accountability Could be Strengthened by Further 
Instituting International Best Practices (GAO-07-597)". Whilst we 
appreciate the opportunity to comment I note with concern that it took 
the US mission several days to submit the draft. 

Further to the technical comments which were submitted yesterday, UNDP 
has taken note of the recommendations put forth in the report. The 
organization is reviewing the issues and I can confirm that a number of 
these issues will be part of the interaction with our Executive Board 
during June 2007. 

Thank you for your consideration. 

Yours sincerely, 

Signed by: 

Salleppan Kandasamy: 
Officer-in-Charge: 
Office of Audit and Performance Review: 

Ms. Zina D. Merritt: 
Assistant Director: 
International Affairs and Trade: 
U.S. Government Accountability Office: 
Washington D.C. 

One United Nations Plaza, New York, NY 10017: 
Tel: (212) 906 5000: 
Fax: (212) 906 5001: 
www.undp.org: 

[End of section] 

Appendix VIII: Comments from the United Nations Children's Fund: 

UNICEF: 
Office of Internal Audit: 

Comments on the draft report by the United States Government 
Accountability Office Report no. GAO-07-597: 

UNICEF offers the following general comments on the draft report by the 
United States Government Accountability Office (the "GAO"), report no. 
GAO-07-597. 

UNICEF notes that many of the issues considered in the report are in 
fact issues for the UNICEF Executive Board, and UNICEF recognizes the 
importance of ensuring that any discussion of such issues takes place 
within the context of the UNICEF Executive Board. With that in mind, 
UNICEF offers the following points as guidance for the GAO in 
finalizing its report. 

The draft report does not reflect a full appreciation of the specific 
governance structures of United Nations organizations. These are 
reflected in, for example, United Nations General Assembly resolutions 
A/RES/48/162 of 14 January 1994 and A/RES/50/227 of 1 July 1996, which 
provide details on the functions of the Executive Boards of UNDP and 
UNICEF, and the relationship of these Executive Boards to the Economic 
and Social Council and the General Assemble of the United Nations. 
UNICEF has adopted the IIA standards but it is important to recall that 
any interpretation of these standards must be consistent with the 
governance structures in the organization. Any proposal to re-order the 
governance mechanisms so as to align them with a particular 
understanding of the IIA standards would be a matter for the UNICEF 
Executive Board (among other institutions). 

The draft offers a view of "best practice" that is inconsistent with 
certain legislated oversight arrangements. We refer particularly to 
Figure 7 of the draft. For instance, the United Nations Board of 
Auditors, serving as the external auditors, reports to the United 
Nations General Assembly not the UNICEF audit committee; this is a 
decision of the  Member States. The report of the Board of Auditors on 
its audit of UNICEF financial statements is submitted to the United 
Nations General Assembly; it is presented to the UNICEF UNICEF 
Executive Board for information only. 

The GAO may also wish to recall that the IIA has provided guidance to 
the heads of the internal audit services of the United Nations system's 
organizations on the proper application of IIA standards in respect of 
the governance structures in these organizations. In 2002, the 
President of the IIA opined that "as long as your reporting 
relationship permits you to accomplish your responsibilities, as stated 
in [IIA} standard 1110, you are reporting to the correct level." 
Administrative reporting to the executive head of an organization is in 
accordance with IIA standards. 

On the question of the reporting lines for the organization's Audit 
Committee, and the reporting of the internal audit service generally, 
it is important to note that the internal audit service provides a 
detailed summary of audit activities, findings, and an analysis of 
systematic weaknesses to the governing body. With Decision 2006/18 of 8 
September 2006, the UNICEF Executive Board requested UNICEF to further 
enhance the level of analysis in the annual report of UNICEF's Office 
of Internal Audit, and include management responses to the key and 
recurring issues identified by the Office of Internal Audit, and to 
assess and report on the resources required for the internal audit 
function. Members of the UNICEF Executive Board have thus already 
spoken on the reporting arrangements they wish to have in place. 

Claus Andreasen: 
Director, Office of Internal Audit: 

Date: 18 May, 2007: 

The following are GAO's comments on the United Nations Children's Fund 
letter dated May 18, 2007. 

GAO Comments: 

1. UNICEF commented that our draft report did not reflect a full 
appreciation of the specific governance structures of the United 
Nations. We provide information in the introduction, background, and 
body of our report to help our readers understand the context of our 
three reporting objectives. Our review was not of the overall UN 
governance structures, but rather of the governance structures of the 
six UN affiliated organizations noted in our report. Figure 1 in our 
report shows the overall UN governance structure of the six UN- 
affiliated organizations reviewed. 

2. UNICEF noted that any proposal to reorder the governance mechanisms 
so as to align them with a particular understanding of the IIA 
standards would be a matter for the UNICEF Executive Board (among other 
institutions). We recognize that decisions regarding changes in 
UNICEF's lines of reporting to allow UNICEF's governing body access to 
all audit reports, as well as the creation of an independent audit 
committee to be in line with international best practices, will require 
consideration and approval by UNICEF's Executive Board. In addition, 
State and several of the other UN organizations reviewed noted that 
discussions relating to our recommendations are currently being 
considered in many forums throughout the UN system. 

3. UNICEF stated that the draft offered a view of "best practice" that 
is inconsistent with certain legislated oversight arrangements. Current 
best practice calls for the external auditor to report to an audit 
committee, which is part of the governing body, which in this case is 
the General Assembly. Therefore, the current reporting by UNICEF's 
external auditor is consistent with IIA's guidance, and we do not 
suggest that it be changed. 

4. UNICEF commented that in 2002, the President of IIA opined that "as 
long as your reporting relationship permits you to accomplish your 
responsibilities, as stated in [IIA] standard 1110, you are reporting 
to the correct level." UNICEF stated that administrative reporting to 
the executive head of an organization is in accordance with IIA 
standards. We do not imply that reporting to the executive head is not 
in accordance with IIA standards. IIA guidance does provide that, at a 
minimum, the organizational independence of the internal audit activity 
needs to allow audit work that is without interference by the entity 
under audit and is seen as independent as well. IIA guidance describes 
the audit committee's responsibility for overseeing internal audit as 
well as the reporting relationship between internal audit and senior 
management. By having the UNICEF internal audit activity report 
organizationally to an independent audit committee of the governing 
body, the independence and appearance of independence would be 
significantly improved. 

5. UNICEF noted that its internal audit service provides a detailed 
summary of audit activities, findings, and analysis of systemic 
weaknesses to the governing body. In addition, UNICEF stated that its 
Executive Board has requested that UNICEF further enhance the level of 
analysis in the annual report of UNICEF's Office of Internal Audit, 
include management responses to the key and recurring issues identified 
by the Office of Internal Audit, and assess and report on the resources 
required for the internal audit function. We updated our report to 
reflect these actions. 

[End of section] 

Appendix IX: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Thomas Melito, (202) 512-9601 or m [Hyperlink, melitot@gao.gov] 
elitot@gao.gov: 

Staff Acknowledgments: 

In addition to the person named above, Phyllis Anderson, Assistant 
Director; Zina Merritt, Assistant Director; Debbie Chung; Jane Kim; 
Andrea Miller; and Barbara Shields made key contributions to this 
report. In addition, Jeffrey Baldwin-Bott, Valerie Caracelli, Martin De 
Alteriis, Mark Dowling, Etana Finkler, Jackson Hufnagle, Charlotte 
Moore, and Jena Sinkfield provided technical support. 

[End of section] 

Related GAO Products: 

United Nations: Management Reforms Progressing Slowly with Many 
Awaiting General Assembly Review. GAO-07-14. Washington, D.C.: October 
5, 2006. 

United Nations: Weaknesses in Internal Oversight and Procurement Could 
Affect the Effective Implementation of the Planned Renovation. GAO-06-
877T. Washington, D.C.: June 20, 2006. 

United Nations: Oil for Food Program Provides Lessons for Future 
Sanctions and Ongoing Reform. GAO-06-711T. Washington, D.C.: May 2, 
2006. 

United Nations: Internal Oversight and Procurement Controls and 
Processes Need Strengthening. GAO-06-710T. Washington, D.C.: April 27, 
2006. 

United Nations: Funding Arrangements Impede Independence of Internal 
Auditors. GAO-06-575. Washington, D.C.: April 25, 2006. 

United Nations: Lessons from Oil for Food Program Indicate Need to 
Strengthen Internal Controls and Oversight. GAO-06-330. Washington, 
D.C.: April 25, 2006. 

United Nations: Procurement Internal Controls Are Weak. GAO-06-577. 
Washington, D.C.: April 25, 2006. 

Peacekeeping: Cost Comparison of Actual UN and Hypothetical U.S. 
Operations in Haiti. GAO-06-331. Washington, D.C.: February 21, 2006. 

United Nations: Preliminary Observations on Internal Oversight and 
Procurement Practices. GAO-06-226T. Washington, D.C.: October 31, 2005. 

United Nations: Sustained Oversight Is Needed for Reforms to Achieve 
Lasting Results. GAO-05-392T. Washington, D.C.: March 2, 2005. 

United Nations: Oil for Food Program Audits. GAO-05-346T. Washington, 
D.C.: February 15, 2005. 

United Nations: Observations on the Oil for Food Program and Areas for 
Further Investigation. GAO-04-953T. Washington, D.C.: July 8, 2004. 

United Nations: Observations on the Oil for Food Program and Iraq's 
Food Security. GAO-04-880T. Washington, D.C.: June 16, 2004. 

United Nations: Observations on the Management and Oversight of the Oil 
for Food Program. GAO-04-730T. Washington, D.C.: April 28, 2004. 

United Nations: Observations on the Oil for Food Program. GAO-04-651T. 
Washington, D.C.: April 7, 2004. 

Recovering Iraq's Assets: Preliminary Observations on U.S. Efforts and 
Challenges. GAO-04-579T. Washington, D.C.: March 18, 2004. 

United Nations: Reforms Progressing, but Comprehensive Assessments 
Needed to Measure Impact. GAO-04-339. Washington, D.C.: February 13, 
2004. 

Weapons of Mass Destruction: U.N. Confronts Significant Challenges in 
Implementing Sanctions against Iraq. GAO-02-625. Washington, D.C.: May 
23, 2002. 

United Nations: Reform Initiatives Have Strengthened Operations, but 
Overall Objectives Have Not Yet Been Achieved. GAO/NSIAD-00-150. 
Washington, D.C.: May 10, 2000. 

United Nations: Progress of Procurement Reforms. GAO/NSIAD-99-71. 
Washington, D.C.: April 15, 1999. 

United Nations: Status of Internal Oversight Services. GAO/NSIAD-98-9. 
Washington, D.C.: November 19, 1997. 

(320442): 

FOOTNOTES 

[1] The UN system is composed of the main Secretariat and separately 
administered funds and programs and specialized agencies. For example, 
funds and programs include the United Nations Children's Fund and the 
United Nations Development Program, which have executive boards and 
executive heads but are under the authority of the UN Secretary- 
General. In contrast, specialized agencies, such as the Food and 
Agriculture Organization, have their own governing bodies and executive 
heads and are not under the authority of the Secretary-General. The 
agencies, which are legally independent international organizations 
with their own rules, membership, organs, and financial resources, were 
brought into relationship with the United Nations through negotiated 
agreements. 

[2] We reported in 2006 that UN funding arrangements constrain OIOS's 
ability to operate independently and recommended that reliable funding 
arrangements that do not undermine the independence of the office be 
made. See GAO, United Nations: Funding Arrangements Impede Independence 
of Internal Auditors, GAO-06-575 (Washington, D.C.: Apr. 25, 2006). 

[3] GAO, United Nations: Management Reforms Progressing Slowly with 
Many Awaiting General Assembly Review, GAO-07-14 (Washington, D.C.: 
Oct. 5, 2006). 

[4] WFP is a subsidiary of both the United Nations and the Food and 
Agriculture Organization. 

[5] IIA is recognized as the internal audit profession's leader in 
certification, education, research, and technological guidance. IIA 
provides comprehensive guidance for internal auditing through its 
Professional Practice Framework, including the International Standards 
for the Professional Practice of Internal Auditing, which outlines the 
tenets of the internal audit profession and the Role of Auditing in 
Public Sector Governance that defines key elements needed to maximize 
public sector audit activity. 

[6] UNEG is a group of professional practioners. UNEG adopted standards 
and norms in 2005 to professionalize the evaluation function, provide 
guidance to evaluation offices in preparing their evaluation policies 
or other aspects of their operations, as well as to guide the 
establishment of the institutional framework, management of the 
evaluation function, and the conduct and use of evaluations. 

[7] GAO-06-575. 

[8] BOA examines the UN Secretariat and other UN organizations within 
the Secretary-General's authority. BOA is presently composed of the 
heads of the national audit offices of France, the Philippines, and 
South Africa. Unlike the other funds and programs, WFP does not fall 
under BOA's jurisdiction. Instead, WFP's governing body appoints its 
external auditor in accordance with WFP's Financial Regulations. The 
National Audit Office of the United Kingdom currently serves as the 
external auditor of WFP and ILO, while the Comptroller and Auditor- 
General of India serves as the external auditor for WHO and FAO. 

[9] JIU primarily examines thematic areas, such as the possibility of 
outsourcing certain services that cut across UN organizations. Although 
the JIU statute provides it with the mandate to conduct investigations, 
at the time of our study, it did not have the resources to carry out 
its mandate to investigate wrongdoing, according to JIU. 

[10] For the purposes of this report, oversight functions include 
audit, investigation, and evaluation functions. 

[11] Contributions to WFP are dependent on an ongoing needs assessment 
for emergency food aid. Therefore, State could not provide us with an 
estimate for U.S. contributions made in 2007. 

[12] Corporate evaluations have a scope that is of interest to the 
whole organization and have systemic implications. 

[13] ILO said that its public page contains full text reports of major 
evaluations and abstracts of all other independent evaluations. 
According to UNICEF, as established by the Evaluation Committee Rules 
and Procedures in June 2004, the evaluation office will assume that all 
reports are suitable for public dissemination unless informed in 
writing by the commissioning office. 

[14] In June 2006, the governing body of UNDP approved its first 
evaluation policy, which is in line with the requirements of UNEG norms 
and standards. 

[15] UNDP defines strategic evaluations as those evaluations that 
assess its performance in areas that are critical to ensuring sustained 
contribution to development results in the context of emerging 
development issues and changing priorities at the global and regional 
levels. Strategic evaluations may cover the organization's policies and 
programmatic approaches. 

[16] This information is based on IIA's review of WFP's audit function 
in 2006. 

[17] ILO prepares a comprehensive risk-based work plan on a biennium 
basis and updates the work plan annually. 

[18] However, according to ILO's audit chief, the 2007 work plan is 
based on current staffing levels, and the achievement of the work plan 
will be subject to demands placed on the audit office to undertake 
investigations. 

[19] The $13 million would have allowed high-risk countries to be 
audited once every 2 years, medium-risk countries once every 3 years, 
and low-risk countries once every 4 years. 

[20] AutoAudit is an electronic audit system that is widely used in the 
audit industry. The planning, execution, and follow-up actions of all 
audits are documented in AutoAudit. 

[21] The Standards of Conduct for the International Civil Service were 
prepared by the International Civil Service Advisory Board and were 
adopted by the United Nations General Assembly in resolution 56/244 in 
2001. Regarding ethics, the Standards of Conduct state that 
international civil servants may be required to disclose certain 
personal assets if this is necessary to enable their organizations to 
make sure there is no conflict. 

[22] Although the IIA standards do not call for organizations to 
establish an ethics office or to provide compulsory ethics training, 
some UN organizations have made efforts to implement such policies. 
Among the six organizations we studied, only ILO and UNDP have 
established an ethics office or officer, while WHO is discussing 
whether to create such an office or position. The other organizations-
-FAO, UNICEF, WFP, and WHO--had not taken steps to establish such an 
office or position. UNDP is the only organization that we examined that 
has instituted compulsory ethics training, a best practice, for its 
employees. UNICEF offers voluntary ethics training to its staff, while 
other organizations have not developed or implemented such training. 

[23] "Evaluation office" as used in this report refers to evaluations 
conducted or managed, or both, by headquarters, regional, and country 
offices. 

[24] Strategic evaluations are those that assess performance in areas 
that are critical to ensuring sustained contribution to development 
results in the context of emerging development issues and changing 
priorities at the global and regional levels. These strategic 
evaluations may cover policies and programmatic approaches. 

[25] UNICEF reported that evaluation resources are scarcer for the more 
expensive evaluations, including corporate-level and country-program 
evaluations. Donor-funded efforts usually do not face implementation 
constraints, but quality may be less than desired if the country office 
does not have a fully skilled evaluation staff. 

[26] UNICEF reported that it had 48 evaluation professionals in 2002, 
and 68 in 2006. 

[27] UNICEF has 126 country offices and 7 regional offices. 

[28] The evaluations conducted by UNDP fall into two categories: (1) 
independent evaluations conducted by the evaluation office at 
headquarters and (2) decentralized evaluations managed by country 
offices, regional bureaus, and practice and policy bureaus that are 
conducted by consultants. 

[29] Annual Report of the Administrator on Evaluation in 2005 (May 
2006). 

[30] The officials said that resources are inadequate for regular 
program activities and significantly inadequate for extrabudgetary 
programs. 

[31] ILO's evaluation office at headquarters has three professional 
staff. The fourth evaluation professional staff joined the evaluation 
office in 2007 on a temporary basis for 1 year. 

[32] In addition, in 2005, UNEG performed a baseline review of its UN 
evaluation members and, among other things, reported that management 
follow-up and quality assurance processes were found to be consistently 
weak, according to UNICEF. UNEG Task Force on 'Quality Stamp' for 
Evaluation - Baseline Synopsis of UNEG Members (December 2005). 

[33] WHO's OIOS is composed of audit, evaluation, and investigation 
functions. According to the director, the office has chosen the IIA 
standards as the overarching professional guidance because they are 
more independent and authoritative than UNEG standards and are 
responsive to the evaluation function. However, OIOS also has adopted 
the UNEG standards for its evaluation function and applies them 
accordingly in the performance of evaluation projects. In addition, WHO 
conducted an internal self-assessment that was validated by an external 
party. The scope and findings of this review were not provided to GAO. 

[34] According to UNDP, the evaluations produced by country offices, 
besides being used for programmatic improvement, are building blocks 
for strategic, global, regional, and country program evaluations. 

[35] This peer assessment was designed under the auspices of the 
Organization for Economic Cooperation and Development/Development 
Assistance Committee Network on Development Evaluation. 

[36] Annual Report of the Administrator on Evaluation in 2005 (May 
2006). 

[37] UNICEF Evaluation Office, The Quality of Evaluations Supported by 
UNICEF Country Offices 2000-2001 (September 2004). In this 2004 report, 
UNICEF stated that nearly one-third of its evaluations are poor, and 
that major improvements and value for money can be gained by enhancing 
quality. 

[38] ALNAP reviews UN organization evaluations on humanitarian 
assistance programs and comments on their quality. 

[39] This program committee is a committee of the member countries 
(governing bodies). 

[40] In addition, UNICEF's peer review panel reported in May 2006 that 
management responses have not been systematically required until 
recently, and that there has been no system for tracking follow-up of 
recommendations. 

[41] See G.A. Res. 59/272, U.N. GAOR, 59TH Sess., U.N. Doc A/RES/59/272 
(2005). 

[42] All six UN organizations that we studied have adopted IIA's 
International Standards for the Professional Practice of Internal 
Auditing. 

[43] In May 2004, WHO's governing body merged the Administration, 
Budget and Finance Committee, the Audit Committee, and the Programme 
Development Committee into a single committee, composed of its members, 
called the Program, Budget and Administration Committee. 

[44] WHO's governing body is composed of 32 members. 

[45] WFP's audit committee charter does not specify whether the report 
that the governing body receives is the same report submitted to the 
head of the organization. 

[46] Total 2004-2005 biennium budgets (in billions of US dollars) for 
the following UN organizations include regular and extrabudgetary 
resources: UNDP, $7.13; WFP, $5.99; UNICEF, $4.87; WHO, $3.98; FAO, 
$1.34; and ILO, $0.90. 

[47] GAO, United Nations: Funding Arrangements Impede Independence of 
Internal Auditors, GAO-06-575 (Washington, D.C.: Apr. 25, 2006). 

[48] For the UNDP peer review, the reviewers assessed the evaluation 
functions on the basis of the norms, and for UNICEF, the peer reviewers 
used primarily the norms. UNDP's peer review was completed in December 
2005, and UNICEF's was completed in May 2006. 

[49] The Geneva Group consists of the 14 largest donor countries on the 
basis of their contributions. 

[50] The Group of 77 is a coalition of developing countries that 
promotes its members' collective interests. Currently, 131 developing 
countries are members of the G-77. 

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