United Nations Organizations:
Oversight and Accountability Could Be Strengthened by Further Instituting International Best Practices
GAO-07-597, Jun 18, 2007
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.
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.
- Review Pending
- Closed - implemented
- Closed - not implemented
Recommendations for Executive Action
Recommendation: To improve oversight in UN organizations, the Secretary of State should direct the U.S. Missions to work with member states to 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.
Agency Affected: Department of State
Status: Closed - Implemented
Comments: When we reported in 2007, none of the governing bodies of six United Nations (UN) organizations - - Food and Agriculture Organization (FAO), International Labor Organization (ILO), United Nations Development Program (UNDP), United Nations Children?s Fund (UNICEF), World Food Program (WFP), and World Health Organization (WHO) - - had full access to internal audit reports. All six organizations provided annual reports to their respective governing bodies that only included summaries of their internal audit activities. Department of State officials informed us that the International Organizations (IO) Bureau and all IO Bureau missions have worked since 2007 to increase access to internal audit reports at UN organizations. According to State, as of 2011, all six UN entities now allow the governing bodies access to internal audit reports upon request, but some restrictions remain. For example, five entities' policies allow either the inspector general or the head of the organization to redact or withhold audit reports in the case of extraordinary circumstances (WHO policies do not address this topic). U.S. officials said that, as of August 2011, no audit reports that they had requested were either withheld or redacted. Further, five of the entities only allow onsite reading and no copies can be made (WFP's policies do not address this subject). According to a U.S. official, although WFP's policy is silent on methodology for access, in practice, WFP sends internal audit reports to the requesting board member via email. Finally, five entities' policies apply only to reports issued after approval by their boards and not retroactively (WHO policies do not address this topic). Despite the various policy limitations on transparency and the general lack of retroactive access, U.S. officials said access to internal audit reports at the six entities has generally improved.
Recommendation: To improve oversight in UN organizations, the Secretary of State should direct the U.S. Missions to work with member states to 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: (1) ensuring communication and reporting lines between the head of internal audit and the audit committee, (2) reviewing internal audit staffing and ensuring that the function has the necessary resources, (3) reviewing and assessing the annual internal audit plan, (4) reviewing management's responsiveness to internal audit findings, and (5) monitoring and assessing internal audit effectiveness.
Agency Affected: Department of State
Status: Closed - Implemented
Comments: When we reported in 2007, among six United Nations (UN) organizations - - Food and Agriculture Organization (FAO), International Labor Organization (ILO), United Nations Development Program (UNDP), United Nations Children's Fund (UNICEF), World Food Program (WFP), and World Health Organization (WHO) - - five had audit committees (ILO did not) but only one of these audit committees (that of WHO) was accountable to the governing body, comprised solely of external versus internal members who were independent of management, and in line with the Institute of Internal Auditors' standards and best practices. According to the State Department officials, since 2007, the International Organizations (IO) Bureau and its missions have led efforts to revise the terms of reference for the audit committees to bring them in line with the Institute of Internal Auditors' standards and best practices and are committed to improving audit committees' accountability to member states. Since we reported, the WFP's audit committee is now comprised of independent, external members and is accountable to both the governing body and the executive director. Similarly, FAO's and UNICEF's audit committees are now comprised only of external members, but the committees are still accountable to the heads of the organizations rather than their governing bodies. In November 2007, the ILO governing body approved the establishment of an independent audit committee on a four-year trial basis. The audit committee's terms of reference will be considered for renewal at the November 2011 governing body meeting. According to the Department of State, the U.S. was a driving force behind the creation of the audit committee and will be a very strong supporter of its permanent establishment. UNDP's audit committee structure, which was comprised of external members appointed by and accountable to the head of the organization, remains unchanged.