Distr.
GENERAL
FCCC/CP/1998/INF.1
5 October 1998
ENGLISH ONLY
CONFERENCE OF THE PARTIES
Fourth session
Buenos Aires, 2-13 November 1998
Item 7 of the provisional agenda
1. The financial procedures of the Convention stipulate that "the accounts and financial management of all funds governed by these financial procedures shall be subject to the internal and external audit process of the United Nations" (FCCC/CP/1995/7/Add.1, decision 15/CP.1, annex I, para. 18). The Office of Internal Oversight Services (OIOS), a department of the United Nations which is responsible for the functions of internal audit, conducted an audit of the secretariat in late 1997 and early 1998.
2. Attached to this note is the full, unedited text of the OIOS report, as requested by the Subsidiary Body for Implementation at its eighth session (see FCCC/SBI/1998/6, para. 74). The executive summary of the report, along with the reply by the secretariat to the audit observations and its report on the status of implementation of the recommendations, is contained in document FCCC/CP/1998/10.
3. The Conference of the Parties may wish to take note of the information contained in the report of the internal auditors, as well as the comments by the secretariat, and provide guidance to the Executive Secretary, as necessary.
GE.98-
AUD-6-5:7 (0838/98) 4 May 1998
To: Mr. Michael Zammit Cutajar, Executive Secretary
Permanent Secretariat
United Nations Framework Convention on Climate Change
Bonn, Germany
From: Egbert C. Kaltenbach, Deputy Director
Audit and Management Consulting Division
Office of Internal Oversight Services
Subject: Audit of the UNFCCC Secretariat (AE97/49/1)
1. I am pleased to submit to you the report on the audit of the Secretariat of the United Nations Framework Convention on Climate Change which was conducted from September 1997 to January 1998. All recommendations require action by the UNFCCC Secretariat, except for Rec. # AE97/49/014 which is addressed to UNOG.
2. When commenting on the audit recommendations, please refer to the recommendation number concerned in order to facilitate monitoring of their implementation status. Please indicate a time schedule for the implementation of each accepted recommendation.
3. I would appreciate receiving your reply by received by 30 May 1998.
cc: UN Board of Auditors
Mr. J. P. Halbwachs, OPPBA
Mr. M. Baquerot, UNOG
Planning and Compliance Officer, OIOS
Ms. C. Chavez, AMCD
Mr. N. Grigoriev, AMCD
After the relocation of the UNFCCC Secretariat from Geneva to Bonn, it gradually assumed the administrative and financial functions previously performed by UNOG based on authority delegated by the UN Secretariat. To perform these functions properly, the UNFCCC Secretariat needs to improve its internal controls in the areas of finance, procurement, contracts and property management, personnel and consultants. Our main findings were as follows:
(ref. paras. 21-26).
Assignment No. AE97/49/1 4 May 1998
CHAPTER PARAGRAPHS
I. INTRODUCTION 1- 4
II. AUDIT OBJECTIVES 5
III. AUDIT SCOPE 6
IV. OVERALL ASSESSMENT 7 - 9
V. DETAILED FINDINGS AND RECOMMENDATIONS 10 - 67
A. System of internal controls 10 - 20
B. Accounting and financial reporting 21 - 26
C. Procurement 27 - 35
D. Property management 36 - 42
E. Personnel 43 -51
F. Consultants 52 - 62
G. Travel and communications 63 - 65
VI. ACKNOWLEDGEMENT 66
1. We conducted an audit of the United Nations Framework Convention on Climate Change (UNFCCC) Secretariat in Bonn from September to October 1997 and in Geneva from December 1997 to January 1998. The Convention, established in March 1994, has more than 160 Parties with the Conference of Parties (COP) being its governing body. The UNFCCC Secretariat, which moved from Geneva to Bonn in August 1996, is headed by an Executive Secretary.
2. In its Resolution 50/115, the United Nations' General Assembly endorsed the COP's decision at its first session in 1995, to link the UNFCCC Secretariat institutionally with the United Nations (although UNFCCC was not integrated into the UN work programme and the administrative structure of any of its Departments or Programmes). At its first session, the COP also adopted the Financial Procedures to govern the financial administration of the Conference. For those areas not specified under those procedures, the UNFCCC Secretariat follows the Financial Regulations and Rules of the United Nations.
3. The Convention's budget for the biennium 1996-1997 was $18,664,200, not including conference-servicing costs which were funded under the United Nations regular budget at $5,517,000 for the same biennium. At the time of our audit, the UNFCCC Secretariat had a total of 75 staff members (including temporary staff members), eight of whom were involved in administration.
4. The audit findings and recommendations were discussed with UNFCCC management and their comments are shown in the report marked in italics.
5. The objectives of the audit were to evaluate the adequacy of the administrative and financial arrangements and internal controls at the UNFCCC Secretariat to ensure that financial and operational information was reliable and timely; mandates, resolutions, policies and plans were complied with; assets were safeguarded; and value for money was achieved in the use of available resources.
6. We reviewed internal controls in place for accounting, personnel, procurement and property management systems. We tested a sample of transactions in 1996-97 for validity and substance and reviewed financial reports for this period for reliability, completeness and accuracy.
7. Since its move to Bonn in August 1996, the UNFCCC Secretariat, under difficult conditions, has been active in building its capacity in administrative and financial areas based on the authority delegated to it by the UN Secretariat. From July 1997, it has independently handled travel related functions. The level of the imprest account reached DEM 800,000 (about $435,000 at DEM 1.84 to $1) in July/August 1997 for local handling of expenditures for UNFCCC meetings.
8. The UNFCCC Secretariat, despite its efforts to cope with the demands of setting up a reliable administrative system. still had to improve internal controls in finance, procurement, contracts and property management, personnel and consultants. It needed to overcome the crisis management mentality attributable to the lack of staff in important administrative positions occasioned by its relocation to Bonn. Before our audit, the Chief of Administration ended her assignment with the UNFCCC after one year of work, and the Budget/Finance Officer had just arrived during our visit to Bonn. The post of Personnel Officer remained vacant. We were assured that the UNFCCC Secretariat would strive to hire a new Chief of Administration and Personnel Officer as soon as possible.
9. It was agreed that the UNFCCC Secretariat would be more systematic in its dealing with UNOG. On the other hand, UNOG should extend necessary guidance and assistance to UNFCCC in a more structured manner.
Establishing internal controls
10. The UNFCCC Executive Secretary was provided with a considerable delegation of authority for personnel, finance and procurement from the Secretary-General of the United Nations. This delegation requires the establishment of adequate internal controls in the respective areas.
11. To achieve this objective, the UNFCCC Secretariat should establish a well-defined internal control system, including documentation of the procedures and controls used in each of the financial and administrative areas. Internal guidelines existed only in procurement and travel, and these guidelines needed improvement. The system should be reviewed within the UNFCCC Secretariat, discussed with UNOG and, in certain cases with the UN Headquarters for policy guidance. The UNFCCC Secretariat could not provide us with a clear-cut performance plan as of the commencement of operations in Bonn that would allow for the comparison of goals set versus actual outputs. Therefore, we believe that increased attention should also be paid to strategic planning and performance management at UNFCCC.
12. Since the UNOG Division of Administration provides important financial and common support services to the UNFCCC Secretariat, the value of contacts at different levels of the organization should not be underestimated. In this regard, a visit by the UNOG Chief of Administration to Bonn was planned in 1997, but we were informed that the visit did not occur. Management also informed us that they had organized training at UNOG for individual staff of the UNFCCC Secretariat. However, they could not provide us with a detailed training plan establishing training objectives and specific areas to be covered.
We recommend that the UNFCCC Secretariat establish well-defined systems of internal control in all areas of finance and administration; give proper attention to strategic planning and performance management; and take concrete steps to enhance performance planning and training for UNFCCC Secretariat staff (Rec # AE97/49/1/001).
Documenting internal control procedures
13. UNFCCC should pay more attention to documenting the system of internal controls and to establishing written policies and procedures for the conduct of UNFCCC activities. Within UNFCCC's internal information technology system, many administration data elements remained fragmented and were not linked to each other. For example, there was no interaction between finance, procurement and property management and there was no available planning document clearly establishing the parameters and timetable of this necessary integration. UNFCCC's expressed intention to integrate these databases is a positive development.
14. According to financial and common services arrangements for administrative support of the UNFCCC, the Secretariat was exempt from the requirement to submit cost plans for the trust funds supporting the Convention and annual substantive reports to the United Nations Secretariat. Nonetheless, we believe that UNFCCC should adopt appropriate financial planning and reporting practices suitable for its own administrative needs and for such other purposes as may be determined by the Conference of Parties.
15. We observed that UNFCCC's existing financial planning and reporting practices for the trust funds were informal and not in writing. UNFCCC officials said that they could not prepare expenditure plans in 1997 for the core budget trust fund because of the lack of staff. Following our queries, the Secretariat officials stated that annual reports were being prepared for the Conference of Parties. Nevertheless, we believe that the internal financial planning and reporting system should be more detailed than presentations to the legislative body. The UNFCCC Secretariat intends to adopt a more result-oriented approach to financial planning for the biennium 1998-1999, which should provide a closer link between the programmatic and budgetary aspects of planning and reporting.
16. UNFCCC tried to implement controls in the personnel area, however, at the time of our audit key documents relevant to this process remained in a draft form. Thus, following our inquiry on different aspects of staff recruitment including vacancy announcements, gender and geographical balance, they provided us with discussion papers on several personnel policy issues. We were pleased to learn that in March 1998, a document entitled "Personnel Policy in the UNFCCC Secretariat: Appointment and Career Development" was sent to the Under-Secretary-General for Management for comment.
We recommend that UNFCCC document the information technology links among finance, procurement and property management, and reinforce financial planning and reporting practices for the trust funds (Rec # AE97/49/1/002).
Other internal control issues
17. One of the important issues in the review of the internal control environment is to establish whether the institution is staffed with individuals possessing the requisite knowledge and skills. This aspect is critical in view of the relocation of UNFCCC to Bonn and consequent changes of functions. Equally important are current job descriptions and performance standards.
18. The post of the Chief of Administration was occupied from 15 August 1996 to 14 August 1997 by a staff member who had considerable experience in personnel matters but no experience in finance and accounting. She agreed to serve as Chief of Administration on the understanding that she would be supported by an experienced Budget/Finance Officer. However, during her tenure in Bonn, the post of the Budget/Finance Officer remained vacant.
19. We noted that in the area of administration, four General Service staff were performing a number of important functions under one general job description for Personnel, Finance and Budget, Meetings, General Services and other functions. Based on a single job description for the four staff members concerned, we had difficulties establishing the specific responsibilities of these staff.
20. Furthermore, the audit found that in one case involving an amount of DEM 220,731 ($120,000) for the rental of the Bad Godesberg Stadthalle for a meeting of Subsidiary Bodies, there was not a clear division of staff responsibilities for bidding and verification of invoices during the handling of this case. Although a decision was taken on this contract in June 1996, the case was only presented to the UNOG Committee on Contracts on an ex-post facto basis in early 1997. The case led to legal problems for the Secretariat involving issues of legal fees and interest charges for late payment.
We recommend that UNFCCC give more careful consideration to staffing the Secretariat's administrative and financial areas. UNFCCC management should prepare accurate and up-to-date job descriptions, establish clear division of responsibilities in critical
areas, and ensure that cases are presented to the UNOG Committee
on Contracts on a timely basis (Rec # AE97/49/1/003).
21. According to the Interoffice Memorandum on Financial and Common Services Arrangements for Administrative Support to the UNFCCC Secretariat dated 19 April 1996, the UNOG Director of Administration, in consultation with the UNFCCC Executive Secretary, is responsible for maintaining the accounts for UNFCCC, approving payments on behalf of UNFCCC Secretariat, providing payroll services, recording obligations and disbursements, and reporting the accounts to the Executive Secretary in accordance with established procedures. After the relocation of UNFCCC to Bonn, the approving functions for the UNFCCC Imprest Account were delegated to the Coordinator, Implementation and Planning as Principal Approving Officer and to the Executive Secretary as Alternate Approving Officer.
Backlog in VAT reimbursement
22. A one-year backlog existed in the submission of claims for reimbursement of Value Added Taxes (VAT) from the Government of Germany. Although the UNFCCC Secretariat began operations in Bonn in the second half of 1996, it established the relevant VAT reimbursement account only in June 1997. Management stated that the question of getting back the original invoices for VAT reimbursement purposes (which are normally sent to UNOG with the monthly accounts) would be discussed with the UNOG Financial Resources Management and Electronic Service, and decided upon before the expiration of the one-year filing limit for VAT reimbursement claims.
Need to improve controls for advances, accounts receivable and accounts payable
23. Improvements needed to be made in recording salary advances. The UNFCCC Secretariat staff should promptly record all salary advances in the books of account as receivables at the completion of each transaction. They should also prepare ageing reports and reconcile accounts receivable regularly. With the arrival of the Budget/Finance Officer, they should introduce the division of responsibilities in this area.
24. The UNFCCC Secretariat should also set up accounts payable based upon obligating documents including travel authorizations, purchase orders and miscellaneous obligating
documents (MODs). In addition, UNFCCC should establish a vendors' accounts payable ledger and review procedures to prevent the double payment of invoices and to help ensure that prompt payment discounts are availed of.
25. In connection with the review of the accounts payable, the Secretariat could not provide us with documentation to show that they had established a system for completing the Receiving and Inspection (R&I) reports. The R&I report, requisition and purchase order should always be provided, together with the vendor's invoice, for review by the accounting staff before they effect payment. Furthermore, the separation of receiving and payment functions should be ensured and documented.
26. The decentralization of travel arrangements has led to the delegation of new accounting functions (and an accompanying allocation of Travel Authorization numbers) to the UNFCCC Secretariat. These arrangements should also provide for an allocation of Purchase Order numbers and MOD numbers to help UNFCCC keep better track of unliquidated obligations. In this connection, the UNFCCC Secretariat should consider steps to link the obligating system with the system of Approval Routing Forms (ARFs), an internal system of blocking funds in the UNFCC Secretariat, to avoid possible duplication.
We recommend that the UNFCCC Secretariat take appropriate steps to:
(i) eliminate the backlog in claims for reimbursement of VAT;
(Rec #AE97/49/1/004)
(ii) improve the system of recording advances, and regularly prepare ageing reports and reconcile accounts receivable;
(Rec # AE97/49/1/005) and
(iii) enhance the accounts payable system by including procedures to avoid duplicate payments and ensure availing of discounts. Steps should also be taken to integrate the two existing systems of funds blocking to avoid possible duplication.
(Rec # AE97/49/1/006)
Delegation of authority
27. The financial and common services arrangements established in 1996 for administrative support to the UNFCCC Secretariat provided approval authority to the Executive Secretary for up to $50,000 per transaction. Contracts exceeding $50,000 fall under Financial Rule 110.17 (d) as applicable to UNOG and require written advice from the UNOG Committee on Contracts (COC).
28. To clarify the procedure to be followed by UNFCCC, the UNOG COC reviewed the delegation of authority and recommended that cases over $50,000 be presented to the UNOG COC for written advice. Also, the Committee has requested for the Purchase and Transportation Section (PTS), whenever necessary, to make its written comments on the reports prepared by UNFCCC. Thus, UNFCCC is treated in the same way as the Regional Commissions and the International Criminal Tribunals, according to the annex to Mr. Connor's memorandum on
procurement thresholds dated 25 July 1996, although UNFCCC was not expressly mentioned in the annex to this memorandum.
29. The preliminary work (e.g. launching RFP, evaluation of proposals, preparation of the reports to the COC), will be undertaken by UNFCCC in Bonn. Further interpretation of Mr. Connor's policy memorandum of 19 April 1996 concerning the authority of UNFCCC to sign contracts for the amounts exceeding $50,000 once approved by the Director-General, was given by the Chief of PTS in a fax dated 9 October 1997.
Procurement Procedures
30. Our audit of procurement disclosed that the UNFCCC staff dealing with procurement did not receive adequate training to handle large procurement actions. This was evidenced by the recent purchase of computer equipment, a procurement action which was rejected twice by the UNOG COC. Also, UNFCCC`s procurement procedures, established by a 3 March 1997 memorandum signed by the Chief of Administration and reviewed by the Management Group of UNFCCC, did not entirely comply with the provisions of the UN Procurement Manual. We further noted that these procedures had not been discussed with UNOG`s Purchase and Transportation Section (PTS) for accuracy and completeness.
31. We noticed that for some procurement actions, there was no segregation of duties between the requisitioner and the procurement function in the UNFCCC. According to the UNFCCC procedures, the requisitioner must present three written quotations for the purchase of items over $1,000. That means that the requisitioner contacts the supplier to obtain quotations, in contravention of established United Nations procurement procedures.
32. The UNFCC procedures state that the Administration will initiate competitive bidding. Our review of a number of procurement cases revealed, however, that substantive offices prepared the requests for proposals without consulting the Administrative Assistant responsible for procurement tasks. Furthermore, for some procurement actions, the substantive office engaged a consultant to prepare the bidding documents. Moreover, the requisitioner kept the procurement files and did not always submit the technical specifications to the procurement unit.
33. Purchases over $20,000 require competitive bidding. In these cases, the requisitioner is required to provide the names and addresses of at least three suppliers. This practice was adopted because the UNFCCC does not have a vendor roster, thus resulting in reliance on the requisitioner to find the appropriate vendors. The UN Procurement Manual, Section 5.02 states that a vendor roster should be maintained on a worldwide basis thus enlarging the number of prospective suppliers and enhancing competitiveness. Although UNFCC's limited staffing and procurement requirements may not permit the development of a worldwide vendor roster, efforts should be made over time to develop a roster of vendors which could be solicited for routine purchases.
34. For procurement actions in excess of $50,000, the UNFCCC procedures contain more details on the bidding process as to the date, time and place for the opening of bids. Also, UNFCCC invites representatives of the tendering vendors to attend the bid openings. Those details are not mentioned in the bidding procedures for purchases over $20,000 but, in our view, they should also be applied to purchases between $20,000 and $50,000.
35. For the opening of bids, UNFCCC did not always follow the procedures established by UNOG. Our discussion with the Administrative Assistant responsible for procurement also revealed that purchase orders were not being sent to the suppliers for signature. According to the UN Procurement Manual, the purchase order (original and first copy) should be issued to the vendor after acceptance of an offer. It also states that the purchase order may only be accepted by the vendors' signing and returning an acknowledgement copy. Moreover, the reconciliation of goods delivered to the substantive offices with the invoices for payment purposes turned out to be difficult since the delivery receipts were not attached to the invoices being processed for payment. The introduction of a procurement planning system should also be considered.
We recommend that UNFCCC request the UNOG Purchase and Transportation Section to review the procurement procedures for completeness and accuracy (Rec # AE97/49/1/007).
We further recommend that UNFCCC ensure that:
(i) the duties of staff dealing with procurement matters are properly segregated and they are provided with substantive procurement training; (Rec # AE97/49/1/008)
(ii) the involvement of requisitioners in the procurement process is limited to the preparation of specifications and the technical evaluation of bids; (Rec # AE97/49/1/009) and
(iii) the provisions of the UN Procurement Manual are complied with to the extent possible, and that the reasons for any exceptions to established procurement policies be appropriately documented. (Rec # AE97/49/1/010).
36. Our inspection of UNFCCC's non-expendable property and special items, and related inventory records revealed that the responsibilities within the Administration for recordkeeping and performing physical inventory checks were not clearly defined. Also, the internal control procedures for safeguarding non-expendable property and special items were not established. Several property listings for various types of equipment were kept by different persons, but there was no computerized master inventory list. Our test checks of the inventory records and
discussions with the responsible officials revealed that the movements and transfer of custody of portable computers were not properly controlled.
37. The Secretariat stated that they had performed a physical inventory in June 1997. However, they had not analysed or reported the results of this check, and in the absence of a master inventory list, the Administration had no firm basis for establishing whether or not any equipment items were missing.
38. There were also deficiencies in the identification of equipment, since no standard practice for decaling of equipment was established: some equipment items had new Bonn tags while others still had old Geneva tags. Furthermore, some attractive equipment items, such as computers, were not decaled at all.
39. There was no system for authorizing the removal of equipment from the UNFCCC premises. According to the UN regulations, a personal property receipt must be completed and signed by the staff member involved and approved by a designated official. The introduction of this system was recommended in a September 1996 report to the Chief of Administration, but it had not been established as of the date of the audit.
40. Since no system was in place to authorize removal of UNFCCC property, in the case of any losses of equipment, it would be difficult to establish accountability for the losses and to effect recovery from the responsible individuals. This exposes UNFCCC to unnecessary risks. The UNFCCC officials agreed with our concerns over the security of equipment.
41. Having performed the field audit at the UNFCCC offices in Bonn, we also requested the UNOG Purchase and Transportation Section to provide us with a list of non-expendable property and special items in use at the UNFCCC office in Geneva. Our review of the list showed that it still reflected the inventory situation when the UNFCCC was located in Geneva, although the move to Bonn took place in August 1996.
42. During the discussions in Geneva, we were informed that before the relocation, PTS requested that UNFCCC inform them about its plans concerning the transfer and disposal of equipment. However, this information was not provided by UNFCCC and there were no minutes of that meeting. We therefore proposed that: a physical inventory be taken at UNFCCC, Geneva; the results of this inventory be reconciled with information available from UNFCCC in Geneva and Bonn; and any relevant cases of missing equipment be reported to the Property Survey Board for its action.
We recommend that UNFCCC:
(i) prepare a complete list of non-expendable property and special items in conformity with UN requirements, reconcile this list with the results of physical inventories taken in Geneva and
Bonn, and report any cases of missing equipment items to the
UNOG Property Survey Board for appropriate action;
(Rec # AE97/49/1/011) and
(ii) rectify the deficiencies in tagging equipment, establish a system for authorizing the temporary removal of equipment from UNFCCC premises, and consider insuring computer equipment against loss or damage. (Rec # AE97/49/1/012)
Delegation of authority
43. The audit included a review of personnel matters and personnel arrangements at UNFCCC. In accordance with Mr. Connor's Interoffice Memorandum on personnel arrangements for the Secretariat of UNFCCC for the biennium 1996-1997 dated 28 December 1995, United Nations Staff Rules and Regulations apply to UNFCCC and are to be followed with respect to personnel administration and management. By this memorandum, the UNFCCC Executive Secretary was delegated authority for certain personnel issues. He has the authority to appoint, promote and terminate appointments of UNFCCC staff. However, the delegation of authority was not clear as to whether UNFCCC was granted the authority to establish a temporary post financed from the Special Trust Fund for the Voluntary Supplementary Financing.
44. The memorandum further stated that UNOG would submit quarterly reports to both the Executive Secretary and to OHRM. However, the responsible officer informed us that such reports had not yet been issued. According to a 19 June 1997 e-mail message sent by Mr. Kinley, Coordinator, Implementation and Planning, to Mrs. Pecorini, UNOG Recruitment Officer, UNFCCC was in the process of undertaking with UNOG and DAM/HQ a review of the overall administration arrangements. However, at the time of the audit, the Secretariat could not provide us the results of the review of personnel issues.
We recommend that the UNFCCC clarify with UN
Headquarters its authority for the establishment of posts.
(Rec # AE97/49/1/013).
We also recommend that UNOG provide the quarterly
personnel reports regularly and punctually (Rec # AE97/49/1/014).
Personnel administration
45. The Administrative Assistant/Personnel was overloaded with different tasks and did not receive adequate training. The staff member was responsible for the recruitment and administration of Professional and General Service staff, consultancy contracts, distribution and collection of UN forms for education grant, home leave and medical reimbursement. The staff member was also the IMIS focal point, holder of the petty cash fund and the Secretary to the Appointment and Promotion Board.
46. There was no detailed job description of the major duties and responsibilities of the Administrative Assistant/ Personnel. In this connection, we were informed that the post of Personnel Officer would be filled in the near future. This would enable UNFCCC to establish a division of responsibilities for personnel administration matters and to maintain appropriate checks and balance.
47. While reviewing the personnel files, we noted that job descriptions were not available for all staff members, were not updated or did not accurately reflect the tasks performed by the staff member. We also observed that responsibility for a certain area was assigned to different staff members. Other personnel documents including Letters of Appointment, Offers of Appointment, and UN Personal History forms were not always in the files. This situation may have resulted from the absence of clear arrangements regarding the administration of staff personnel files. Files were kept at UNOG`s Personnel Administration, at the UNFCCC office in Bonn and at the Liaison Office in Geneva. Also, we noted that the implementation of the Performance Appraisal System (PAS) had just been started.
Overtime
48. On 21 March 1997, UNFCCC issued an Overtime Policy for General Service Staff. According to this policy, overtime should be worked only with prior approval. For that purpose an overtime request, approval and reporting form was established. We reviewed the forms and noted that the overtime approvals were not always signed.
Attendance Records
49. The normal working hours for Bonn are from 8:30 to 17:30, representing a 40-hour work week. UNFCCC has established the policy of "flexi-time" with core hours from 9:30 to 12:00 and 14:30 to 16:30. However, no system was in place to account for actual hours worked. The staff members did not record their time worked and, therefore, the responsible official could not verify the hours of attendance.
Appointment and Promotion Board
50. According to the Interoffice Memorandum on personnel arrangements, the Executive Secretary has the authority to establish an Appointment and Promotion Board (APB). The memorandum stated that the UNFCCC APB would follow the procedures of the Appointment and Promotion Board at Headquarters. It also provided that the Board would consist of three members and three alternates.
51. The established terms of reference and procedures for the UNFCCC APB for 1997 foresaw a quorum of at least two members or alternates, including the Chairperson and voting by a simple majority of members or alternates present at the meeting. We were informed, however, that this was an oversight and that generally there were three people present at the APB's meetings. The document entitled "Functions and Procedures of the Appointment and Promotion Board" which was approved by the Management Group on 11 March 1998, states that three members or alternate members with the right to vote shall constitute a quorum for the conduct of business.
We recommend that UNFCCC ensure that substantive training
is provided to the staff dealing with personnel matters, and that the
procedures on overtime and attendance are clarified and followed
(Rec # AE97/49/1/015).
Lack of training and relevant Administrative Instructions for recruitment of consultants
52. Based on a review of a number of consultancy files, we observed non-compliance with the Administrative Instructions for the recruitment of consultants. The Administrative
Assistant/Personnel did not receive adequate training to perform the task of recruiting consultants, and did not have copies of the relevant ST/AIs and guidelines for their engagement.
Inadequate selection procedures
53. Paragraph 4 of ST/AI/296 states that consultants should be selected from among candidates who are highly qualified in the specific field and from as wide and representative number of countries as possible. The names of the potential consultants should be listed and reasons given for the recommendation of a particular candidate. The "Request for Outside Expertise or Professional Services" includes a space for the names of candidates considered (normally a list of at least three candidates) and the reasons for recommending a certain candidate.
54. In each of the cases we reviewed, only one candidate had been proposed for the contract and no justification was provided for selection of the candidate. UNFCCC Personnel should establish a roster of consultants. Such a roster, if properly maintained, could provide a more diverse source of potential consultancy candidates, and could therefore help UNFCCC in identifying highly qualified consultants.
Absence of specific terms of reference
55. Terms of reference for consultants were sometimes very brief and did not contain sufficient details. The absence of detailed terms of reference made it difficult to verify consultants output and actual work performance and the propriety of related payments. For example, a comparison of the Terms of Reference for two consultancy contracts awarded to one consultant (Ms. M. N.) revealed no difference, except for the dates of the meetings.
Post-facto signing of contracts
56. Although para. 15 of ST/AI/296 states that consultants should not commence work until the relevant contract has been duly approved and signed on behalf of the United Nations and by the individual concerned, we observed that some contracts were not signed until after the consultants began working. We understand that at times, the physical absence of a consultant means that he/she is unable to sign the contract on or before the commencement date of the assignment. However, the Administrative Instruction provides that in such cases acceptance can be transmitted by cable or other communication in writing.
Lack of statement of good health
57. According to para. 26 of ST/AI/296, consultants who are expected to work in any office of the Organisation shall be required to complete a statement of good health. However, we observed that UNFCCC did not request the consultants working at the UNFCCC premises to provide such a statement. We were informed that UNOG Personnel Service did not request these statements either. We therefore draw management`s attention to the provisions of this instruction.
Non-compliance with the provisions in the event of death, injury or illness
58. Paragraph 24 of ST/AI/296 states that compensation would be payable to a consultant who is authorized to travel or to perform his or her services in a United Nations Office in the event of death, injury or illness, equivalent to amounts that would be payable under Appendix D to the Staff Rules. At the same time, there were no provisions in place for UNFCCC to make contributions to the special fund for this purpose.
Non-compliance with the provisions for remuneration of consultants
59. According to para.17 of ST/AI/296, the determination of the level of remuneration to be offered to a consultant is the sole responsibility of the appropriate personnel service. However, UNFCCC did not follow this provision. UNFCCC should obtain the UNOG guidelines on remuneration of consultants which would be useful in setting the consultants' remuneration levels.
60. Furthermore, we observed that contracts did not provide explanations for partial payments. According to ST/AI/296, para.20, payments in instalments should be related to a certain output stipulated in the agreement. The ST/AI also states that each payment to a consultant shall require certification using the Payment Voucher for outside expertise and professional services (F.183 form). Our review revealed that Payment Vouchers were not always kept on file and were not used for the installment payments.
61. We also noted a case when a consultancy contract was intentionally interrupted after 30 days and renewed shortly afterwards, apparently for the sole purpose of providing the consultant a higher rate of DSA payments.
Inadequate system of filing outputs
62. A centralized documentation system permits outputs to be located and used in the absence of the staff member directly responsible for commissioning a particular piece of research. Furthermore, monitoring and control over the outputs can be improved where an office independent from the substantive branches maintains the documentation. We noted, however, that a central filing system for consultancy outputs was established only recently within UNFCCC. Consequently, staff may not have been aware of reports and studies that have been prepared by consultants engaged outside their immediate section or area of direct responsibility.
We recommend that the UNFCCC Secretariat assure that staff involved in the recruiting of consultants are properly trained, a roster of consultants is established, and that the provisions of
ST/AI 296 for the engagement of consultants are complied with.
In particular, UNFCCC should ensure that:
(i) selection procedures are adhered to (names of the potential consultants should be listed and reasons given for the recommendation of a particular candidate), and UNOG guidelines for the remuneration of consultants are taken into account;
(ii) no consultancy work commences until the relevant contract has been signed and the statement of good health has been provided;
(iii) detailed terms of reference are prepared, including the specific tasks and duties to be performed and the approximate schedule for completion of tasks in cases of longer consultancies; and monitoring of outputs is improved;
(iv) Payments in instalments are effected only after proof of the completion of specific assignment phases has been submitted to UNFCCC; and
(v) provisions are established for UNFCCC to make contributions to the special fund for the payment of compensation in the event of a consultant's death, injury or illness
(Rec # AE97/49/1/016).
Delegation of authority for travel functions
63. UNOG initially processed travel arrangements for UNFCCC, but subsequently delegated travel related functions to the latter. For this purpose, UNFCCC elected to share the services of a travel agency (American Express Travel Services) contracted by the United Nations Volunteers (UNV).
Recovery of personal telephone calls
64. UNFCCC introduced a system that provides each staff member with a pin code in order to register private calls. However, our review of controls established to recover the cost of personal calls, revealed that relevant procedures were not being followed. As a result, staff members on short term contracts could leave UNFCCC without reimbursing the Organization for their private phone calls. We also had no assurance that communication expenses were regularly analysed by the responsible UNFCCC officials.
65. In the course of the review performed in the UNFCCC Geneva Liaison Office, we noted that personal telephone calls made in 1995 totalling $202.97 was reimbursed to UNFCCC through the UNOG Treasury only in 1997. We were informed that reimbursement was still outstanding for some more personal calls.
We recommend that the UNFCCC Secretariat improve the implementation of its system for recovering the cost of personal telephone calls (Rec # AE97/49/1/017).
66. We wish to express our appreciation for the assistance and cooperation provided to the auditors by the management and staff of the UNFCCC Secretariat.
Egbert C. Kaltenbach
Deputy Director
Audit and Management Consulting Division, OIOS